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 markets will remain tight into the latter half of 2027, citing persistent supply disruptions and counter-seasonal stock drawdowns ahead of peak winter demand.
- A 1.3 million barrel-per-day shortfall from Russia and the Middle East, driven by refinery damage linked to the Iran war, was only partially offset by higher supply from other sources, the IEA said.
- Wholesale diesel prices reached record highs above $200 a barrel in Singapore and around $220 in Europe and the United States, raising goods costs and weighing on real incomes and inflation.
- IEA members are coordinating the release of 100 million barrels of oil and diesel from strategic reserves to stabilize volatile prices amid widespread economic and political pressure on energy markets.
- The agency warned that renewed attacks in the Gulf leave the recovery fragile, with replenishment of lost inventories unlikely before the second half of 2027 unless regional conflicts resolve.
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Delivery failures and high costs: the situation on the diesel market is tense, which according to the IEA should remain so even longer.
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.
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