The International Energy Agency said in its October Oil Market Report that tightness in the diesel market could persist not just in the coming months, but until the second half of 2027. The agency said that even if refinery throughput recovers quickly by year-end, supply in the fourth quarter of 2026 would still fall short of demand.
According to the IEA, gasoil markets tightened in the third quarter in a way that was unusual for the season, after much steeper inventory declines than normal in the previous three months. That left global markets with too little stock cover heading into the peak winter demand period.
IEA data showed global diesel exports fell by 700,000 barrels a day in September from a year earlier. A loss of 1.3 million barrels per day from Russia and the Middle East was only partly offset by higher supply from other sources.
The agency also said wholesale diesel prices topped $200 a barrel in Singapore in mid-September and reached record highs of around $220 a barrel in Europe and the United States. Retail prices, it added, have risen in tandem to record levels across most major economies.
Last week, U.S. President Donald Trump said he had agreed with Vladimir Putin for Russia to immediately supply 300,000 metric tons of diesel to the global market. But the IEA said the proposed Russian deal would have limited macroeconomic impact. It also warned that renewed attacks in the Gulf could derail the recovery in oil supply.
