IEA Sees Diesel Supply Tightness Lasting Into Late 2027
The agency says refinery gains will not close the diesel gap this quarter, while supplies may remain constrained through late 2027.
Key takeaways
- The IEA expects diesel supply to remain tight into the latter half of 2027.
- Global diesel exports fell by 700,000 barrels a day year on year last month.
- The IEA forecasts global oil demand will fall by an average 2.6 million barrels a day in 2026.
The International Energy Agency expects diesel supply to remain tight into the latter half of 2027, citing disruptions linked to the Iran war. The agency said supply would fall short of demand in the fourth quarter of 2026, even with refinery output expected to recover quickly.
Global diesel exports fell by 700,000 barrels a day year on year last month, according to IEA data. A 1.3 million-barrel-a-day decline from Russia and the Middle East was only partly offset by higher supply elsewhere, the agency said.
The IEA said inventories had fallen sharply ahead of winter demand. Wholesale diesel prices topped $200 a barrel in Singapore in mid-September and reached records of about $220 in Europe and the United States.
The agency forecasts global oil demand will fall by an average of 2.6 million barrels a day in 2026. Diesel is expected to account for about 25% of that drop, while the Turkish-language report said Iran-related supply constraints, higher fuel prices and a weaker economic outlook were among the reasons for lower demand.
The IEA expects global oil supply to decline by 5.8 million barrels a day on average this year, then rise by 7.7 million barrels a day in 2027. It warned that renewed attacks in the Gulf could put the recovery at risk.
This article was produced with the help of AI technology. Based on reporting by the outlets listed above.
