The global diesel market will continue to be under strong tensions "well into 2027," even if the rapid improvement expected in refinery production at the end of the year occurs. This is stated by the International Energy Agency (IEA), which considers it unlikely that the lost reserves can be rebuilt before the second half of 2027.
According to the October bulletin of the agency based in Paris, "the supply of diesel does not cover the demand in the fourth quarter of 2026, which suggests that the replenishment of lost stocks, beyond the usual seasonal fluctuations, is unlikely before the second half of 2027."
In this context, the agency anticipates that "the balance of the diesel market will remain tight until well into 2027" and will be heavily conditioned by the normalization of supply from the Middle East.
The IEA emphasizes that the scenario remains delicate: any unexpected disruption, such as a hurricane on the Gulf Coast of Mexico in the United States, could further strain the market. At the same time, it considers it "unlikely" that a potential easing of restrictions on Russian diesel exports will significantly alter the situation of the global diesel market.
In its report, the agency explains that diesel markets have remained under considerable pressure, forcing reliance on inventories during an unusual period, due to prolonged supply disruptions. Only in September, global diesel exports were 700,000 barrels per day below those of a year earlier, as the drop of 1.3 million barrels per day from Russia and the Middle East was only partially offset by the increase in production from other sources, including the United States.
As a result, although international diesel prices have retreated from the historical highs of over 200 dollars per barrel recorded in September, they still remain close to double the price of crude oil and clearly above pre-crisis levels. This increase is already impacting the real economy, raising the cost of products, diminishing real incomes, slowing activity, and adding pressure to inflation.
Outlook for the global oil market
In relation to oil, the IEA highlights the improvement in supply observed in September, when crude oil exports from the Gulf approached the volumes prior to the outbreak of the conflict in the region. However, it warns that the recent intensification of attacks on energy infrastructure and on the traffic of oil tankers "threatens to halt this progress."
In light of the increasing security risks from Houthi attacks in the area during October, the agency has chosen to keep its forecasts for the rest of the year virtually unchanged. Its calculations indicate that the global oil supply will average 101.4 mb/d in the second half of 2026, compared to 96.4 mb/d in the second quarter of 2026.
According to these projections, global oil production will register an average year-on-year decline of 5.8 million barrels per day in 2026, down to 100.7 mb/d, before changing course and increasing by 7.7 million barrels per day in 2027.
On the consumption side, after year-on-year reductions of 5 mb/d in the second quarter of 2026 and 3.7 mb/d in the third, the IEA expects global oil demand to decline again by 2.5 mb/d in the fourth quarter. The balance for the year would thus be an average decline in global consumption of 2.6 million barrels per day, down to a total of 102.4 mb/d.