Goldman Sachs warns of worsening global diesel shortage

The global diesel market remains severely tight due to refinery disruptions in Russia and the Middle East. According to Goldman Sachs, refinery outages are currently running around 60% above seasonal norms, while refined product inventories continue to decline. The bank’s analysts describe diesel as the “epicenter” of the current rally in refined products.

Goldman Sachs has more than doubled its forecast for diesel refining margins in 2027. The margin for producing a barrel of diesel over Brent is now expected to average $63/barrel in the US, up from the previous forecast of $27, and $49/barrel in the EU, compared with $19 previously. European gasoil futures have already more than doubled since the beginning of the year.

Supply disruptions from major exporting regions remain one of the key drivers of the shortage. Russia has extended its diesel export ban through the end of September amid refinery disruptions. Meanwhile, refined product exports from the Persian Gulf are running at only around 40% of pre-war levels, although crude oil shipments have recovered to approximately 70–80%.

Tight market conditions are already reshaping global trade flows. Asian diesel shipments to Africa could reach 1.8–2 mln tons in August, the highest level in at least 4.5 years, while Middle Eastern exports to Africa have fallen to 600–800 thsd tons, close to a nine-year low. High refining margins are encouraging Asian refiners to increase production.

Additional pressure could come from seasonal demand growth, particularly in Brazil, the world’s second-largest diesel importer, as a new cycle of fieldwork begins. For the agricultural sector, a prolonged period of expensive diesel could raise planting, harvesting and road transportation costs, adding further pressure to agricultural production costs.

Tags: price, global market, diesel, Goldman Sachs