The International Energy Agency warned that a global diesel shortage triggered by war-damaged refineries in the Middle East and Russia will extend into 2027, despite efforts to ease trade sanctions and release emergency stockpiles. The shortage has caused pump prices to surge and raised concerns among economists about broad economic consequences, including increased costs for businesses and consumers across agriculture, manufacturing, shipping, and logistics sectors.
Despite the economic headwinds, Western refineries are capitalizing on the supply constraints. TotalEnergies reported that its European refineries, previously viewed as liabilities, have become highly profitable operations. The company’s refining and chemicals division generated $1.8 billion in income between April and June, more than quadrupling from the prior year. Shell similarly expects record profits from fuel production in recent quarters, with refining margins forecast to nearly double to $42 per barrel of refined product.
US refineries have emerged as particular beneficiaries, with fuel exports climbing by more than 50% over the past year to reach an all-time high of 1.9 million barrels daily over the summer. The market values of three major US refiners—Marathon Petroleum, Valero Energy, and Phillips 66—have more than than doubled since the crisis began, with their combined stock value rising $215 billion. These companies are capitalizing on the price differential between crude oil and refined fuel products.
Refiners producing diesel and jet fuel have benefited most from their ability to adjust production capacity toward high-demand fuels. BP stated that it redirected diesel shipments from European refineries to Australia during early shortage pressures and increased jet fuel production by 30% in May to meet demand in Europe. The strategy of flexible capacity utilization has allowed these companies to both ease supply constraints and generate substantial revenues during the prolonged crisis period.
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