1 hour agoIEA warns diesel shortages may last into 2027 as Iran, Ukraine wars squeeze fuel supplies
Diesel shortages could persist well into 2027 as the Iran and Ukraine wars curb output from the Middle East and Russia, the International Energy Agency warned Wednesday.
Diesel refining margins soared to record highs of nearly $95 per barrel in September as attacks on energy infrastructure cut production.
The IEA said combined diesel export losses from the Middle East and Russia totaled 1.3 million barrels per day last month.
“Record diesel prices are already having broad economic consequences by raising the cost of goods and impacting real incomes, economic activity, and inflation,” the IEA said in its monthly oil market report.
“Diesel markets remained under significant strain as prolonged supply disruptions forced counter-seasonal stock draws ahead of autumn refinery maintenance and peak winter demand,” the IEA said.
“As the remaining buffers in the system continue to erode, in the absence of a resolution to the conflicts in the Middle East, oil markets may experience more turmoil in the months ahead before any eventual surplus emerges in 2027.”
The agency said a recovery in refinery operations later this year could help rebuild stocks, but would not make up for the diesel deficit already accumulated.
IEA members are coordinating the release of 100 million barrels of oil and diesel from emergency reserves to ease price pressure.
The warning comes as Middle East crude exports recover from wartime disruptions, with shipments through the Strait of Hormuz rising to 10.9 million barrels per day in September.
But the IEA cautioned that “the recent escalation in attacks on regional energy infrastructure and tanker traffic is threatening to derail further gains.”
Reuters contributed to this report.