Diesel Hits Record €1,384 per Ton in Frankfurt as Indian Export Tax Bites

European diesel prices have crossed the 2022 record for the second consecutive day as India introduces export taxes on petroleum products, compounding the Iran war shock.

Diesel at a Record: India's Export Tax and the Iran War Create Perfect Energy Storm

Diesel fuel prices in Europe have crossed the 2022 record level for the second consecutive day, with the Frankfurt Stock Exchange pricing front-month diesel at $1,384 per ton on March 27, 2026 — significantly above the previous record of $1,230 reached during the worst of the 2022 energy crisis following Russia's invasion of Ukraine. The new record is being driven by a convergence of two major supply shocks that have arrived simultaneously and are compounding each other in ways that energy markets had not fully priced into their base scenarios.

The first shock is the Iran war and the partial closure of the Strait of Hormuz, which has disrupted crude oil and refined product flows from the Gulf region and pushed oil prices from approximately $70 per barrel at the start of February to around $122 per barrel currently — an increase that has mechanically lifted refined fuel prices across the board. The second shock is India's decision to introduce an export tax on petroleum products to protect domestic consumers from the global price surge, effectively removing a significant source of diesel supply that European buyers had come to rely on as a partial offset to their own refining constraints.

India's Energy Minister Hardeep Singh Puri confirmed the export tax in a statement, explaining that the Indian government faced a choice between dramatically raising prices for Indian citizens — as most other countries had done — or bearing the financial burden itself. Delhi chose to protect domestic consumers, a decision that is entirely defensible from a national policy perspective but has created significant ripple effects for global refined product markets that were already stretched. European refiners, who have been operating at high utilisation rates since the Russian oil embargo of 2022, have limited remaining capacity to absorb the additional demand that India's withdrawal from export markets is creating.