The International Energy Agency has warned that a significant global diesel shortage will extend into 2027, despite efforts by governments to ease trade restrictions and release emergency fuel reserves. The shortage stems from damage to refineries in the Middle East and Russia, combined with export limitations from China. Global diesel supplies have declined by approximately one million barrels daily compared to 2025 levels, driving prices sharply higher on forecourts and raising concerns among economists about broader economic impacts.
The supply crunch is creating substantial financial windfalls for major oil refineries, particularly those located in Europe and the United States. TotalEnergies reported that its refining and chemicals division generated $1.8 billion in income between April and June, more than quadrupling its results from the prior year. Shell has indicated it expects record profit margins on refined products for the July to September period, with refining margins forecast to nearly double to $42 per barrel. Three major US refiners—Marathon Petroleum, Valero Energy, and Phillips 66—have seen their combined market value increase by $215 billion this year as shares reached successive record highs.
US fuel exports have climbed over 50 percent during the past year, reaching an all-time high of 1.9 million barrels daily over the summer, offsetting losses from Gulf region production disruptions. Refineries positioned to produce diesel and jet fuel have benefited most from the crisis, with some adjusting production capacity to meet demand surges. BP’s chief executive noted the company successfully deployed diesel shipments from its European and US facilities to address shortages in Australia and increased jet fuel production by 30 percent in May to address supply gaps in Europe.
The underlying dynamics creating these profits involve a significant price differential between crude oil and refined fuel products. While Brent crude prices have eased to around $100 per barrel recently, diesel and other refined fuel products have remained substantially more expensive due to constrained supply and shrinking global stockpiles. This situation has elevated living costs for consumers and raised concerns about inflationary pressure across multiple economic sectors, from agriculture and mining to shipping and transportation.
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