Diesel shortages could persist well into 2027, IEA says
USO•The IEA said constrained diesel supplies could persist into 2027, despite an expected recovery in refinery operations near year-end. Middle East and Russian diesel exports fell by a combined 1.3 million barrels per day in September, while diesel refining margins reached nearly $95 per barrel.
1. Diesel supplies remain strained
Constrained diesel supplies could persist well into next year as counter-seasonal stock drawdowns and restricted production coincide with peak winter demand, the IEA said in its monthly oil market report. Diesel refining margins soared to nearly $95 per barrel in September as attacks linked to the Iran war reduced refining capacity.
2. Supply and demand outlook
The IEA expects global refinery operations to recover toward the end of this year and begin replenishing stocks, but said this would not offset the deficit accumulated this year. Diesel exports from the Middle East and Russia fell by a combined 1.3 million barrels per day in September. The agency forecast global oil demand to contract by 2.6 million barrels per day in 2026, with diesel accounting for 25% of the decline, and global oil supply to fall by 5.8 million barrels per day this year before rising by 7.7 million barrels per day in 2027.
