Global refined product markets are experiencing significant supply constraints despite recovering crude oil availability in Asia. While crude oil imports into the region reached approximately 26.39 million barrels per day in October, approaching pre-war levels, imports of refined products such as gasoline and diesel have remained substantially below historical norms.
The supply disruption stems from multiple sources of production loss. Middle Eastern refineries have operated at reduced capacity following damage sustained during the Iran conflict that began at the end of February, while dangerous maritime conditions in the Strait of Hormuz have complicated fuel transfers. Russia’s fuel exports have declined sharply due to strikes on its refinery infrastructure, and Ukrainian military action has further constrained global diesel availability. These combined factors have elevated refining margins and retail prices to record levels during the third quarter.
Asia’s refined product imports stood at approximately 6.15 million barrels per day in October, roughly 10 percent below pre-war volumes, with Middle Eastern supplies down 18.4 percent. Though imports from the Americas and Africa have increased to partially offset these losses, refineries outside the Middle East and Russia lack sufficient capacity to fully compensate, particularly as winter demand for diesel rises in the northern hemisphere.
Industry analysts and the International Energy Agency project the shortage will extend well into 2027. The IEA reported that global seaborne diesel and gasoil exports averaged 4.7 million barrels per day over the first nine months of 2026, down 10 percent year-over-year. Morgan Stanley highlighted that planned maintenance deferral creates additional pressure, with second quarter 2027 maintenance expected to be two and a half times normal seasonal levels, further constraining global supply availability and potentially necessitating demand reductions if Middle Eastern production does not recover sufficiently.
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