The present invention provides a method for producing hydrocarbon fuels with ultra-low levels of sulfur. The method involves catalytic oxidation of the sulfurous compounds within the hydrocarbon fuel, followed by extraction of the oxidized (and polarized) sulfurous compounds using a polar solvent. The present invention teaches the involvement of ethanol during catalytic oxidation. In this way, the oxidation catalyst has a dual-role in the oxidation process: firstly the catalyst directly oxidizes the sulfurous compounds, and secondly the oxidation catalyst converts of a small portion of the alcohol to the corresponding peroxy acid, which also helps to drive the oxidation process.