From Financialexpress · Anjana PV · · 2m
Global diesel shortage expected to last into 2027
Global diesel shortage may persist through 2027 due to Middle East war disruptions and reduced refinery output.
In brief
Global diesel shortage may persist through 2027 due to Middle East war disruptions and reduced refinery output. Global diesel supplies could remain tight through 2027 as Iran war disrupts exports, reduces refinery output, and leaves countries with falling inventories. Originally reported by Financialexpress.
Global diesel supplies tight into 2027
Global diesel supplies may stay tight well into 2027 as the Iran war disrupts fuel exports, reduces refinery output and leaves countries with falling inventories.
IEA reports 700,000 barrels per day drop
Global diesel and gasoil exports fell by nearly 700,000 barrels per day year-on-year in September 2026.
Middle East exports lag crude recovery
Middle Eastern oil exports have recovered more slowly for refined products than for crude oil.
Crude exports up but refined down
Crude oil exports from Gulf producers rose by 4.4 million barrels per day to 13.9 million barrels per day in September.
Refinery disruptions in Asia
The loss of crude oil flows through the Strait of Hormuz also affected refinery operations in Asia, particularly in China, India and South Korea.
Russian refinery damage
Damage to refineries from Ukrainian drone attacks has reduced the country’s gasoil production and exports in recent months.
Global gasoil exports down
Global gasoil and diesel exports averaged 4.7 million barrels per day during the first nine months of 2026, around 10% below the level recorded a year earlier.
Falling inventories
Stocks held by OECD members fell to 565 million barrels in July, 5% below pre-conflict levels and their lowest since November 2023.
Diesel prices at record levels
Wholesale prices exceeded $200 per barrel in Singapore in mid-September and reached around $220 per barrel in Europe and the United States.
Diesel demand falling
Global diesel demand fell by 1.1 million barrels per day year-on-year in the second quarter to 28.5 million barrels per day.
Market recovery uncertain
The IEA expects the market to remain tight well into 2027, with a sustained recovery in supplies from the Middle East playing a key role in easing the shortage.
G7 commitment to release oil
On October 2, G7 leaders announced a commitment to speed up the release of agreed oil supplies under the IEA’s collective action, with priority given to making diesel available to the market in the coming…
The essence
Global diesel supplies could remain tight through 2027 as Iran war disrupts exports, reduces refinery output, and leaves countries with falling inventories.
