The International Energy Agency warned that a global diesel shortage triggered by war-damaged refineries in the Middle East and Russia will persist into 2027, dampening hopes that recent policy measures would quickly alleviate supply constraints. The shortage has driven diesel prices to record levels, with significant economic consequences including increased costs for goods and services across agriculture, mining, manufacturing, shipping and logistics sectors.
While the fuel crisis poses challenges for global economic growth, major Western refineries are positioned to achieve exceptional profitability from the supply imbalance. European and American energy companies are benefiting from the price differential between crude oil and refined fuel products. TotalEnergies reported that European refineries it previously considered underperforming assets have become highly profitable operations, contributing to the company’s strongest quarterly results in three years. Similarly, the three largest US oil refiners saw their combined market value increase by $215 billion this year, with their share prices reaching successive record highs.
Refiners with flexible production capabilities have gained particular advantages during the crisis. Shell forecasts record profit margins per barrel of refined product in the third quarter, with refining margins expected to nearly double compared to the previous quarter. BP executives highlighted the company’s ability to rapidly redirect diesel shipments to Australia and increase jet fuel production by 30 percent to address emerging supply gaps across different regions.
The supply shortage persists despite efforts to ease trade sanctions and release emergency stockpiles. Global diesel supplies have declined by approximately 1 million barrels daily from 2025 levels, while US fuel exports have climbed more than 50 percent to reach record highs, partially offsetting losses from damaged Gulf refineries. Crude oil prices have moderated to around the $100 per barrel benchmark, but constrained fuel exports and shrinking global stockpiles continue to maintain elevated diesel costs for consumers and businesses worldwide.
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