BRUSSELS, Sept. 28 (Xinhua) -- Record diesel prices are sending shockwaves through Europe's economy, pushing up freight costs and squeezing farmers and businesses as disruptions to Russian and Middle Eastern supplies tighten an already strained global market.
An analysis of data published in the European Commission's latest Weekly Oil Bulletin put the consumption-weighted average retail diesel price across the European Union at a record 2.23 euros (about 2.54 U.S. dollars) per liter.
Wholesale prices have also surged to record levels. The price of 10 ppm ultra-low-sulfur diesel cargoes delivered into Northwest Europe reached 1,642.25 dollars per metric ton on Sept. 15, the highest since the assessment began in 2007, according to Platts, an energy and commodity price benchmark provider.
The surge has put a spotlight on Europe's heavy reliance on diesel and raised concerns that higher transport costs could feed through supply chains and add to broader inflationary pressures.
DIESEL SHOCK RIPPLES THROUGH ECONOMY
Diesel remains the backbone of European road freight. Around 96 percent of trucks currently on EU roads run on diesel, according to the European Automobile Manufacturers' Association. Even among new trucks registered in the first half of 2026, diesel accounted for 92.1 percent.
Given the scale of road freight, higher diesel prices can quickly reverberate across the wider economy. EU trucks transported 13.3 billion tonnes of goods in 2025, generating nearly 1.9 trillion tonne-kilometers of freight activity, according to Eurostat.
Germany, Europe's largest economy and its second-largest road freight market, offers a glimpse of the pressure facing the sector.
The country's Federal Association of Road Haulage, Logistics and Disposal (BGL) estimates that fuel accounts for roughly one-third of a trucking company's total costs. On that basis, a 10-percent increase in diesel prices would raise overall operating costs by about 3 percent.
"These cost increases can hardly be borne by companies alone," BGL executive board spokesperson Dirk Engelhardt said this month, implying that some of the cost will be passed to customers.
The costs are already mounting. Transport & Environment estimates that elevated diesel prices are costing Europe an additional 203 million euros (231 million dollars) a day, with the extra bill for road diesel alone reaching around 40 billion euros (45.51 billion dollars) since the Middle East conflict began in late February.
The broader energy shock is also weighing on Europe's economic outlook. European Central Bank (ECB) estimates suggest that a geopolitical oil supply shock could reduce euro-area real GDP growth by around 0.4 percentage points in its first year, although the estimate applies to the wider oil and energy shock rather than diesel prices alone.
The ECB has also warned that higher energy costs are feeding through the economy. Minutes of its June monetary policy meeting said indirect effects were becoming visible in transport, fertilizer, plastics and import prices, while also contributing to higher food and non-energy industrial goods inflation.
WHY DIESEL IS SO EXPENSIVE
A severe shortage of refined middle-distillate fuels is one of the main drivers of the price surge. The International Energy Agency (IEA) said diesel and gasoil account for nearly 30 percent of global oil demand, while two of the world's most important sources of supply have been hit at the same time.
Net diesel and gasoil exports from Gulf countries averaged only 390,000 barrels per day in August, just over a quarter of their pre-war level, as flows through the Strait of Hormuz remained severely constrained.
Together, Gulf countries and Russia exported around 1.6 million fewer barrels of diesel and gasoil per day in August than in February. Before the disruptions, the two sources accounted for almost 45 percent of global seaborne diesel trade.
European governments are stepping up measures to ease the pressure. France has taken the unusual step of allowing some summer-grade diesel to remain on sale during the first half of November. The government announced the measure on Sept. 18, citing "exceptional supply difficulties" caused by the international situation in the Middle East.
Germany's federal and state governments agreed this month to temporarily cut the energy tax on petrol and diesel, with the reduction expected to take effect on Oct. 1.
Finland, meanwhile, decided on Thursday to allocate about 8.7 million euros (9.9 million dollars) in EU-funded emergency aid to farms hardest hit by rising costs linked to the Middle East crisis.
The country's Agriculture and Forestry Minister Sari Essayah said fuel and fertilizer prices had risen sharply, adding that the support was part of broader efforts to safeguard the viability of Finnish agriculture and the country's security of supply.
Latvia's parliament on Thursday approved a temporary cut in diesel excise duty, while Croatia on Monday extended its fuel-price controls for another week, setting the maximum retail price of diesel at 1.86 euros (2.12 U.S. dollars) per liter from Tuesday.
U.S. MOVE EXPOSES NEW VULNERABILITY
Europe's diesel squeeze has been further complicated by uncertainty over supplies from across the Atlantic.
U.S. President Donald Trump said last week that his administration was considering restrictions on diesel exports amid pressure from Republican lawmakers seeking to lower costs for American farmers and truckers.
The possibility has alarmed Brussels.
"The European Union views with concern the reported U.S. plans to ban diesel exports, including to the European Union," a European Commission spokesperson said on Thursday, adding that high-level contacts with Washington were underway.
The Commission stressed that there is currently "no concrete shortage of diesel" in the EU. But it also acknowledged the scale of Europe's reliance on U.S. supplies, saying around half of EU diesel imports came from the United States in August.
EU data show that the United States has become a major supplier not only of diesel but also of liquefied natural gas to Europe. That reliance has grown rapidly as Europe sought alternatives to Russian energy after 2022 and, more recently, as Middle Eastern supplies were disrupted.
According to market intelligence firm Kpler, the United States has supplied around 180,000 barrels per day of the EU's roughly 580,000 barrels per day of extra-EU diesel imports this year, or about 32 percent. In Northwest Europe, U.S. supplies account for around 57 percent of diesel imports from outside the region.
Zameer Yusof, an energy analyst at Kpler, warned that restrictions on U.S. supplies would force Northwest European buyers to bid more aggressively for replacement cargoes while competing with the Mediterranean, Latin America and West Africa for a limited pool of diesel.
Petras Katinas, an energy security analyst at the Royal United Services Institute, said Europe's growing reliance on U.S. energy exports was intended to reduce its exposure to Russia but could create new vulnerabilities. ■