Global diesel stocks decline as IEA forecasts fuel shortages through much of 2027

The global diesel market is expected to remain in deficit for much of 2027 due to declining inventories and supply disruptions amid the conflict in the Middle East. According to the International Energy Agency’s (IEA) October report, even the expected recovery in refinery operations toward the end of 2026 will not be enough to quickly replenish depleted reserves. A sustained rebuilding of inventories is unlikely before the second half of 2027.

In September, combined diesel exports from Russia and the Middle East declined by 1.3 mln barrels per day. Increased shipments from other regions only partially offset these losses, leaving global diesel exports approximately 700 thsd barrels per day below the previous year’s level. Prolonged supply disruptions are forcing countries to draw down accumulated reserves ahead of the winter season, when fuel demand traditionally increases.

According to IEA estimates, gasoil inventories in OECD countries fell to 565 mln barrels in July, 5% below their level before the Middle East conflict and the lowest since November 2023. Meanwhile, total global oil inventories at the end of September were 509 mln barrels lower than at the end of February. Amid constrained supplies, diesel refining margins climbed to nearly a record $95 per barrel in September, intensifying price pressure in the global market.

For the agricultural sector, diesel shortages pose a risk of further increases in costs for field operations, grain and oilseed transportation, and export logistics. Higher fuel prices could be particularly challenging for producers dependent on road transportation and forced to use longer alternative routes. Rising transportation costs may also reduce farmers’ profitability even if agricultural commodity prices remain relatively stable.

The IEA forecasts that global oil supply could increase by 7.7 mln barrels per day in 2027, creating conditions for an improvement in the overall market balance. However, the diesel market itself is expected to remain under pressure due to low inventories and limited capacity to rapidly increase refining output. IEA member countries are already coordinating the use of strategic oil and diesel reserves to ease shortages and reduce the risk of further price shocks.

Tags: fuel, diesel fuel, global market