The International Energy Agency (IEA) has warned that pressure on global diesel markets could persist into the second half of 2027 as the effects of the war in the Middle East continue to disrupt supplies, even as refinery output is expected to recover in the coming months.
In its October Oil Market Report, the agency said supplies would remain tight until the second half of next year, adding that depleted inventories may not begin to recover before then.
Global diesel exports fell by 700,000 barrels per day year on year in September, according to IEA data.
The decline followed a drop of around 1.3 million barrels per day in supplies from Russia and the Middle East, which was only partially offset by increased supplies from other sources.
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Although higher prices have weakened overall oil demand, the IEA said diesel demand has remained relatively strong because consumption is less responsive to price changes and governments have introduced measures to ease the burden on consumers.
The agency also pointed to falling inventories, rising refining margins and a widening gap between near-term and longer-dated futures prices. Together, these indicators reflect the need for additional supplies in a market structure known as backwardation.
Wholesale diesel prices reached record levels in several major markets. Prices exceeded $200 per barrel in Singapore in mid-September and reached around $220 per barrel in both Europe and the United States, according to the IEA.
