Global diesel shortages could persist well into 2027, IEA says

The International Energy Agency (IEA) warns that global diesel shortages may persist into 2027, resulting in high prices, inflation, and economic growth challenges. Conflicts in the Middle East and Russia have limited output, driving up prices and impacting various sectors, including industry, agriculture, and transportation. The record-high diesel prices have created political and economic pressure, with the US urging European Union countries to lower inventories or face potential bans.

Combined diesel export losses from the Middle East and Russia in September amounted to 1.3 million barrels per day, equal to about 4.5% of the global demand. The IEA predicts a continued strain in the diesel market as supply disruptions persist, with inventories decreasing during a typically rising period. A recovery in refinery operations later in the year may help replenish stocks, but it will not fully offset the deficit.

Global oil demand is expected to decline by 2.6 million barrels per day in 2026, with diesel accounting for 25% of the drop. Oil supply is forecast to fall by 5.8 million barrels per day this year, followed by a rise in 2027. Oil prices remain stable, with Brent futures trading at $105.80 per barrel. Reserve releases have slowed to around 270,000 barrels per day, with most of the emergency stocks held by government entities.