The International Energy Agency warned that a global diesel shortage will extend into 2027, despite efforts to ease trade sanctions and release emergency stockpiles. The shortage stems from war-damaged refineries in the Middle East and Russia, combined with export restrictions from China. Diesel, which accounts for 10% of world energy consumption, is critical for agriculture, mining, manufacturing, shipping and logistics sectors.
The supply crunch has created soaring prices that are raising costs for businesses and consumers. Economists express concern about broader economic impacts, from pressure on US agricultural operations to transport operators in the UK. However, major refineries in Western nations are positioned to capture substantial profits from the crisis. Refinery executives have noted that facilities previously viewed as liabilities are now generating significant returns due to high fuel prices.
TotalEnergies reported that its refining and chemicals division income more than quadrupled to $1.8 billion in the April-June period, contributing to the company’s strongest quarterly profits in three years. US-based refiners including Marathon Petroleum, Valero Energy and Phillips 66 have seen their combined market value increase by $215 billion this year. Shell expects record profits from refined fuel production in the most recent quarter, with refining margins projected to nearly double to $42 per barrel, up from $24 in the previous quarter.
Refiners benefiting most are those able to adapt production toward high-demand fuels. BP’s leadership noted the company responded to supply emergencies by shipping diesel from European and US facilities to Australia, and increasing jet fuel production by 30% in May to address European shortages. The strategy of flexible capacity has allowed integrated refiners with multiple locations to capitalize on regional supply gaps while gradually easing the global supply crunch.
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