Diesel squeeze set to last well into 2027 as Iran war disrupts supply, IEA says
The agency said export losses and refinery outages have pushed wholesale and retail diesel prices to record highs.
- On Wednesday, the International Energy Agency warned that global diesel supply constraints will persist well into 2027, driven by prolonged strain and counter-seasonal stock draws ahead of peak winter demand.
- Diesel refining margins soared to record highs of almost $95 per barrel in September as attacks linked to the Iran war slashed production and depleted crucial stock cover.
- Wholesale diesel prices reached all-time highs of around $220 per barrel in Europe and the United States, with the IEA advising that record prices are "having broad economic consequences by raising the cost of goods and impacting inflation."
- Last week, President Donald Trump announced a deal with Russian counterpart Vladimir Putin for Russia to immediately supply 300,000 metric tons of diesel to the global market to offset price rises.
- European Commissioner Valdis Dombrovskis warned that "now is not a time to ease sanctions on Russia," questioning whether the deal's volumes have macroeconomic significance, while the IEA projects supply shortages will continue through the second half of 2027.
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IEA Warns Diesel Markets Stay Tight Through 2027
The IEA warned that Gulf and Russian supply disruptions, refinery damage and depleted inventories will keep diesel markets tight into 2027, with high prices and winter demand adding pressure; a projected recovery in refining could bring a surplus in early 2027, but may not quickly replace lost stocks. The broader oil shock is also expected to curb consumption, and the IEA cautioned that further demand cuts—and their economic costs—may be needed …
The International Energy Agency (IEA) warned today Wednesday that the shortage of diesel supplies could continue until next year, as a result of large withdrawals of stocks and continuing production restrictions, as the peak winter demand season approaches.
Tensions on diesel supply could last until 2027, according to the International Energy Agency. Due to reduced stocks and limited production before the peak in winter demand.
IEA warns European diesel prices could rise as crunch lasts into 2027
Europe could face renewed wholesale diesel price rises in the coming weeks, the International Energy Agency warned on Wednesday, as disrupted supplies leave markets tight well into 2027 despite recovering Gulf oil output.
TIGHT diesel supplies could stretch into much of next year, with limited production ahead of peak winter demand and unusually large stockpiles, the International Energy Agency (IEA) has forecast.
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