Business · Energy & Commodities · 3 hrs ago
Diesel supply crunch could last well into 2027
Asia’s crude oil imports recovered in October to nearly their average level before the Iran war, but imports of refined fuels remain below pre-war levels.
The war, which began at the end of February, damaged or disrupted Middle Eastern refineries and reduced fuel shipments through the Strait of Hormuz.
Russia’s loss of diesel exports after Ukrainian strikes on its refineries has added to the shortage.
As a result, diesel supplies are especially tight, while refining margins and fuel prices reached record highs in the third quarter.
Demand for diesel and other fuels is rising as winter approaches in the Northern Hemisphere, and refineries elsewhere cannot fully replace the lost capacity.
Analysts warn the crunch could last well into 2027, as refineries carry out maintenance that was postponed this year.
China’s diesel and jet fuel exports are uncertain, and additional shipments could ease supply in Asia if they are approved and loaded.
The global diesel supply crunch could last well into 2027, analysts say.
Reduced refining capacity in the Middle East and a lack of Russian diesel exports are limiting supply.
Asia’s crude imports recovered in October, but imports of refined products remained below pre-war levels.
Diesel demand is rising ahead of the northern hemisphere winter, while refineries outside the Middle East and Russia cannot fully replace lost capacity.
Deferred refinery maintenance planned for the spring could prolong the squeeze.
- Who
- Oil market analysts say the diesel crunch could continue into 2027.
- What
- Global diesel supply is constrained, with refining margins and retail prices reported at record highs in the third quarter.
- When
- The crunch is extending into the fourth quarter of 2026 and could last well into 2027.
- Where
- The supply problem is global; Asia’s refined-product imports remain below pre-war levels.
- Why
- Reduced refinery capacity, lower refined-product flows through the Strait of Hormuz and a lack of Russian diesel exports have restricted supply.
This story does not have two clearly opposing sides.
The Iran war began, and supply of gasoline and especially diesel fell.
Asia’s crude imports reached a conflict-period low of 19 million barrels per day.
Asia’s crude oil imports rose to 26.39 million barrels per day, while refined-product imports remained below pre-war levels.
The diesel crunch continued, with analysts saying it could last well into 2027.
Many refineries are expected to undergo maintenance deferred from 2026.
- Asia crude imports in October
- 26.39 million barrels per day
- Asia crude imports in September
- 24.24 million barrels per day
- Asia refined-product imports in October
- About 6.15 million barrels per day, 10% below pre-war levels
- Asia imports from the Middle East
- 18.4% below pre-war volumes
- China October clean-product export plan
- Around 500 kt below September’s
What people are saying
China remains the main Asian uncertainty. October’s clean-product export plan was around 500 kt below September’s, while November diesel and jet export volumes remain unclear
Additional Chinese cargoes could loosen Asian balances, but the market needs greater clarity on approvals and actual loadings.