IEA says diesel supply squeeze may last into 2027

The International Energy Agency expects diesel supplies to stay tight into 2027 despite falling oil demand.

The squeeze involves global markets, with conflict and security risks in the Middle East and Russia affecting supply.

Middle Eastern refined fuel shipments remained below half their prewar levels in September, even as crude exports from Gulf producers recovered to more than 75 percent.

Oil stocks were 509 million barrels below prewar levels at the end of September, with on-land stocks near their lowest point in at least a decade.

High prices and supply limits are reducing consumption, and global oil demand is forecast to fall by 2.6 million barrels a day in 2026.

The oil market is expected to remain in deficit through year-end, and the agency warns that further turbulence may come before a possible surplus in 2027.

Easing the diesel shortage depends on Middle Eastern fuel supplies recovering; without that, more consumption cuts could carry high economic costs.