The International Energy Agency warned that a worldwide 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 persistent supply crunch has already created significant economic pressures, with rising fuel costs affecting businesses and consumers across agriculture, mining, manufacturing, shipping and logistics sectors. Global diesel supplies have declined by approximately 1 million barrels daily compared to 2025 levels, driven by refinery damage in the Gulf, Russian export restrictions, and reduced Chinese exports.
While the shortage poses broad economic challenges, major Western refiners are positioned to generate record profits from the supply-demand imbalance. TotalEnergies reported that European refineries previously viewed as financial burdens have become highly profitable, with the company’s refining and chemicals division generating $1.8 billion in quarterly income between April and June. Shell anticipates record profit margins, forecasting refining margins near $42 per barrel for the July-September period compared to $24 in the prior quarter.
US refiners have experienced particularly strong performance, with fuel exports climbing over 50 percent to an all-time high of 1.9 million barrels daily over the summer. The combined stock value of three major US refiners—Marathon Petroleum, Valero Energy, and Phillips 66—has more than doubled since the crisis began, with shares accumulating $215 billion in market value gains.
Refiners have benefited from strategic flexibility in production. BP reported shifting diesel supplies from European and US West Coast facilities to Australian markets facing shortages, and increasing jet fuel production by 30 percent in May to address European demand. This capacity to adapt production toward high-demand fuels has enabled companies to maximize revenues while partially alleviating global supply constraints. Meanwhile, crude oil prices have moderated to approximately $100-106 per barrel, while diesel prices remain elevated due to constrained supplies and shrinking global stockpiles of refined fuel products.
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