IEA Sees Diesel Supply Staying Tight Through Mid-2027

Diesel and gasoil markets may stay tight through the first half of 2027, the International Energy Agency said, as refinery disruptions and depleted inventories limit fuel supplies.

The IEA estimated that Russia and the Middle East lost 1.3 million barrels per day of diesel exports in September. Higher supplies from other sources only partly offset the shortfall, and global diesel exports fell by 700,000 barrels per day from a year earlier.

A recovery in crude oil flows has not translated into more refined fuel. The IEA expects refinery activity to improve toward year-end, but said supply would still fall short of demand this quarter. The agency expects the market to loosen in the second half of 2027, with inventories unlikely to be replenished before then.

U.S. ultra-low sulfur diesel and European gasoil futures moved back above $200 per barrel equivalent this week, according to Saxo Bank strategist Ole Hansen. He said additional crude exports could not make up for reduced refinery output.

The IEA warned that high diesel prices are raising transport and goods costs and adding to inflation pressures. Diesel is used across freight, agriculture and industry, making shortages a wider economic concern than a rise in gasoline prices alone.