Many MindedDiesel supply stays tight into 2027 as refining margins climb
The International Energy Agency expects diesel supply constraints to last into 2027, with inventories not recovering to comfortable levels until the second half of that year. On October 14 it said diesel refining margins reached nearly $95 a barrel in September, up from $50 in early March. US retail diesel hit $6.28 a gallon by October 9, about 70% higher than when the US-Israeli war with Iran began on February 28.
The supply losses are large. Middle East and Russian diesel exports together fell by 1.3 million barrels a day in September. Russia supplied about 10% of internationally traded diesel in 2025. Its shipments dropped from about 3 million tons a month in April to 325,000 tons in September, after a ban on most diesel exports on July 8 that was partly lifted on October 10. Gulf crude exports have recovered to about 75% of pre-war levels. In March the IEA's 32 members agreed to release 400 million barrels from strategic stocks, and about 331 million had been released by the end of September.
This matters for abundance because diesel is a base cost for moving goods and running farms. Only about 30 million of the roughly 120 million tonnes used each month are traded across borders, so importers are exposed. Egypt imports roughly 40% of its diesel. In January-July its diesel bill was $3.09 billion, about 19% of a $16.53 billion fuel import bill, and larger than its crude bill.
The response is contested. The October 9 US-Russia supply deal, which came with US sanctions relief on Russian diesel until April 2027, is called largely for show by analyst Sergey Vakulenko, and the IEA said its macroeconomic impact would be limited. Vakulenko also says Russia's ban was not strict. A US export ban was floated but not imposed, and the White House denied preparing one. For Egypt, the outlook runs either to stabilization or to renewed price spikes.
Source: Google News