The global diesel shortage could persist well into 2027, according to an oil market report released by the International Energy Agency (IEA) on October 14. Conflicts in the Middle East and attacks on Russian refineries have significantly constrained fuel supplies; in September alone, 1.3 million barrels of diesel per day were missing from these regions. Meanwhile, stockpiles are dwindling ahead of the winter months, a period of high consumption. Consequently, high prices are placing a burden on the transport sector, agriculture, industry, and consumers alike. Despite planned releases from strategic reserves, the IEA does not anticipate a sustained easing of the situation until the second half of 2027.
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Diesel Shortage: Exports from Russia and the Middle East Plummet
Combined net exports of diesel and gas oil from Russia and the Middle East fell by more than 60 percent in September. Compared to the previous year, this represents a decline of 1.3 million barrels per day—a volume equivalent to approximately 4.5 percent of global demand. While additional supplies from the United States and China have reached the market, they have only partially offset these shortfalls.
Damage to refineries and disruptions to key transport routes are having a particularly severe impact. Ukrainian drone strikes have reduced Russia’s refining capacity, while military conflicts in the Middle East are hindering both the production and export of fuels. Although crude oil exports from the Gulf states saw a significant rebound in September, the export of refined petroleum products reached less than half of pre-war levels.
Diesel prices reach record highs – transport and agriculture hit particularly hard
Supply shortages have driven international diesel prices to historic highs. In Europe and the United States, the price of diesel at times reached approximately $220 per barrel in September. Simultaneously, the price premium over crude oil climbed to nearly $95 per barrel. This extraordinary gap illustrates the significant impact that limited refinery capacity is having on the fuel market. Consequently, rising transport costs are driving up the prices of food, industrial goods, and numerous services.
The economic repercussions now extend well beyond the petroleum sector. Farmers rely on diesel to power their machinery, while freight and logistics companies remain dependent on the fuel. Construction firms, mining operations, and various industrial sectors are also grappling with higher energy costs. A particularly challenging aspect is the limited short-term substitutability of the fuel; businesses often cannot significantly reduce their consumption without curtailing their production or services.
Strategic oil reserves intended to stabilize supply
In March, member states of the International Energy Agency (IEA) decided to release 400 million barrels from their emergency reserves, a figure later increased to 426 million barrels. However, by the end of September, only 331 million barrels had reached the market. Furthermore, the pace of these releases has slowed considerably: while an average of 2.2 million barrels per day were made available between March and June, that figure dropped to just 270,000 barrels in September.
The IEA’s governing board is scheduled to meet on October 15 to discuss further measures and the rate of future releases. Europe plays a central role in these deliberations, as the EU continues to import substantial quantities of diesel. In light of this, France has proposed an accelerated release of 50 million barrels of diesel, alongside an additional 50 million barrels of crude oil. US President Donald Trump even threatened European nations with a ban on American diesel exports if they did not make greater use of their reserves. However, additional withdrawals also reduce the buffer against future supply disruptions.
IEA does not expect a lasting easing of the situation until 2027
For the coming months, the International Energy Agency (IEA) anticipates an increase in refinery utilization rates. Global processing capacity is projected to rise from 81.3 million barrels per day in October to 84.6 million barrels per day in December. Nevertheless, this recovery is unlikely to be sufficient to fully offset existing shortfalls. While the market could potentially see a temporary surplus by early 2027, the IEA does not expect inventories to be adequately replenished until the second half of that year at the earliest.
At the same time, the global diesel shortage is exacerbating broader economic challenges. For 2026, the IEA forecasts a decline in global oil demand of 2.6 million barrels per day, with diesel accounting for approximately one-quarter of this reduction. Simultaneously, global oil supply is projected to fall by an average of 5.8 million barrels per day in 2026. Although the agency expects supply to increase by 7.7 million barrels per day in 2027, the supply situation will remain strained unless there is a significant recovery in fuel exports from the Middle East.
Author: Blackout News
Sources: Reuters (14.10.26) – Financial Times (15.10.26) – The Guardian (14.10.26)