Diesel prices across the US and Canada remained below Q1 2024 levels through most of 2025. In the US, lower crude oil prices, steady refinery utilization, and relatively balanced inventories kept supply conditions stable despite short-term fluctuations. Periods of refinery maintenance and seasonal demand led to price increases, but these were not sustained as production normalized and overall demand remained moderate. In Canada, the pattern differed slightly. Prices rose briefly in Q1 2025, likely to reflect tighter inventories early in the year, before falling sharply in Q2 and remaining negative relative to the Q1 2024 levels. Improving supply and easing global oil prices kept Canadian diesel prices lower than both the Q1 2024 baseline and US levels.

In Q1 2026, diesel prices in both markets rose on a QoQ basis from Q4 2025 and edged above Q1 2024 levels. The rebound was driven largely by a low base in late 2025 and with the early stages of supply tightening linked to emerging geopolitical risks. Higher refining margins and a gradual increase in crude prices pushed distillate costs higher. In the US, improved refinery economics and tighter product balances played a role, while in Canada, currency weakness added pressure by increasing the cost of imports.

In Q2 2026, pricing dynamics have shifted toward external supply shocks, particularly disruption to oil flows through the Strait of Hormuz. Unlike Q1, where base effects dominated, Q2 reflects a more acute tightening of global supply. Higher crude prices and sustained refining margins have driven a sharper increase in diesel prices across both markets. In the US, limited short-term supply flexibility is expected to amplify the impact of global price movements. In Canada, while similar cost pressures are present, but temporary policy measures, such as the fuel tax relief, may partially limit price pass-through. Overall, Q2 marks a shift from an initial rebound to more structurally driven upward pressure on diesel price.