Diesel Prices Witness Fluctuations Amid Supply Chain and Geopolitical Challenges: Q2 2025 Update

22-Jul-2025

Amid fluctuating global supply dynamics and varying demand across key markets, the global diesel industry is experiencing notable price movements, according to IMARC Group’s latest publication, Diesel Prices Trend, Index and Forecast Data Report 2025 Edition, that provides updated insights for Q2 2025. The report highlights how the industry is adjusting to geopolitical tensions, domestic policy changes, and market fluctuations. Key markets driving this trend include North America, Asia Pacific, and Latin America, where local supply constraints, refinery outages, and transportation dynamics are influencing pricing patterns.

Q2 2025 Diesel Prices:

USA: USD 3.45/GAL
China: USD 924/MT
Brazil: USD 1.09/Litre
India: USD 1.03/Litre
Australia: USD 1.05/Litre

Q2 2025 Diesel Prices

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The current diesel prices reflect the material's vital role in industries such as transportation, agriculture, and manufacturing, with supply disruptions, policy shifts, and rising geopolitical tensions contributing to a stable to upward global price trend.

Key Regional Price Trends and Market Drivers:

USA

Prices reached USD 3.45/GAL in Q2 2025 due to low diesel inventory levels, rising concerns over supply adequacy, and increasing global tensions. The anticipated rise in retail diesel prices was driven by growing ultra-low sulfur diesel (ULSD) futures prices and supply disruptions.

China

At USD 924/MT, China’s market reflects a downward trend in domestic diesel demand, driven by the increased adoption of electric vehicles (EVs) and LNG-powered trucks, which have reduced reliance on traditional diesel fuels. However, the market showed signs of recovery by June 2025 after a brief decline in production.

Brazil

The price reached USD 1.09/Litre in June 2025, significantly influenced by Petrobras’ price cuts at the refinery gate. These price reductions, supported by lower global crude oil prices, helped maintain market stability despite domestic production changes.

India

In India, diesel prices remained at USD 1.03/Litre in Q2 2025, largely due to domestic policy decisions that kept retail prices stable despite global fluctuations in crude oil prices. Geopolitical concerns and tariff actions had minimal impact on India’s pricing stability.

Australia

Prices increased to USD 1.05/Litre in Q2 2025, as rising benchmark prices like Singapore's Gasoil led to higher wholesale diesel costs, which were expected to reflect at the retail level within 7-10 days.

Diesel Industry Overview:

The global diesel market reached a volume of 1.44 Billion Tons in 2024 and is projected to expand to 1.83 Billion Tons by 2033, growing at a CAGR of 2.57% during 2025-2033. Diesel's central role in sectors like transportation, agriculture, and manufacturing underpins its steady demand, especially as economies grow. The ongoing industrialization and infrastructure development, particularly in developing countries, drive the need for diesel-powered machinery, trucks, and equipment. Diesel engines also remain critical for agricultural practices, powering equipment used in planting, harvesting, and crop processing, which sustains high demand in agriculture-dependent regions.

In addition to traditional uses, the global rise in diesel-powered generators and backup systems is a key driver of demand, particularly in regions with unreliable electricity grids. Diesel’s energy density and reliability continue to ensure its importance, even in the face of increasing regulatory pressures for cleaner alternatives. Furthermore, innovations in diesel engine technology, which have made engines more efficient and environmentally friendly, continue to support the fuel’s relevance and market stability.

Diesel Market Trends and Industry Analysis:

The diesel market faces unique challenges, such as fluctuating crude oil prices, geopolitical instability, and shifts in global supply chains. Diesel prices are highly sensitive to oil market dynamics, and any significant changes in crude oil reserves can directly affect retail prices. For instance, higher oil prices can lead to increased diesel costs, while lower oil prices may stimulate demand for diesel.

Environmental regulations also play a critical role in shaping the market, as stricter emissions standards push innovation in diesel engine technologies. Despite the rising adoption of electric vehicles (EVs) and alternative energy sources like LNG, diesel remains the preferred fuel for heavy-duty vehicles, machinery, and emergency power generation. Additionally, demand from industries like logistics, agriculture, and manufacturing, which rely on diesel engines for their operations, ensures a continued, albeit evolving, market for the fuel.

Strategic Forecasting and Analysis:

IMARC’s report incorporates forecasting models that project near-term price movements based on evolving trade policies, raw material supply, and technological trends. These tools enable businesses to mitigate risk, enhance sourcing strategies, and support long-term planning.

Key Features of the Report:

Price Charts and Historical Data
FOB and CIF Spot Pricing
Regional Demand-Supply Assessments
Port-Level Price Analysis
Sector-Specific Demand and Supply Insights

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