Goldman Sachs Sees Diesel Refining Margins Soaring to $63 a Barrel

Goldman Sachs has revised its profit forecast for refiners, anticipating that margins on diesel will soar to $63 per barrel by 2027 in the United States and $49 per barrel in the European Union. This surge is due to a global diesel shortage, exacerbated by refinery damages in the Middle East and Russia, and a sharp drop in fuel exports from the Persian Gulf.

Refineries in the EU face additional constraints due to a lack of capacity following the shutdown of plants as climate regulations took effect, despite demand not decreasing as anticipated. Meanwhile, several Middle Eastern refineries have been damaged in the ongoing conflict between the U.S., Israel, and Iran, and Russia has imposed a diesel export ban due to production losses from Ukrainian drone attacks.

As a result, refinery margins have reached record highs across the globe, with the crack spread in the U.S. hitting three digits for the first time earlier this month.