The International Energy Agency warned on Wednesday that a worldwide diesel shortage triggered by damage to refineries in the Middle East and Russia will extend into 2027, despite Trump administration efforts to ease sanctions and increase imports. The supply constraints have already driven fuel prices to record levels, creating economic pressures across multiple sectors including agriculture, manufacturing, shipping, and logistics.
While the shortage poses challenges for consumers and businesses globally, major refining companies are capitalizing on the supply-demand imbalance. TotalEnergies, Shell, and US-based refiners including Marathon Petroleum, Valero Energy, and Phillips 66 are positioned to generate substantial profits from the price differential between crude oil and refined products. TotalEnergies reported that its refining and chemicals division income more than quadrupled to $1.8 billion in the April-to-June period, while the market values of three major US refiners have more than doubled since the crisis began, with combined stock gains of $215 billion this year.
Refineries that can flexibly adjust production toward high-demand fuels are seeing the greatest benefits. BP executives noted the company successfully redirected diesel from European facilities to Australia and increased jet fuel production by 30 percent in May to address regional shortages. Shell forecasts record refining margins approaching $42 per barrel for the third quarter, compared to $24 in the second quarter. US fuel exports have climbed more than 50 percent over the past year to reach an all-time high of 1.9 million barrels daily, offsetting losses from damaged Gulf facilities.
The sustained price advantage for refiners comes as global diesel supplies have declined approximately one million barrels daily from 2025 levels due to facility damage and export restrictions from China. Crude oil prices have eased to around $100 per barrel recently, though geopolitical concerns have pushed prices above $106, while the constrained fuel supply keeps refined product prices elevated and global stockpiles of diesel, gasoline, and jet fuel shrinking.
Article Attribution | Read More at Article Source
Article summary produced by Claude AI