Global diesel shortages could drag into 2027, IEA warns

The world’s diesel shortage could persist well into 2027 due to the ongoing wars in Ukraine and Iran, resulting in high fuel prices and economic stagnation around the globe, the International Energy Agency (IAE) warned on Wednesday.Combined losses of diesel exports from the Middle East and Russia hit 1.3 million barrels a day in September, the agency said in its newest report — representing about 4.5% of the global diesel and oil demand the IAE forecasts for this year.

“Record diesel prices are already having ​broad economic consequences by raising the cost of goods and impacting real incomes, economic activity, and inflation,” the agency said.“As the remaining buffers in the system continue to erode, in the absence of a resolution to ​the conflicts in the Middle East, oil markets may experience more turmoil in the months ahead before any eventual surplus emerges in 2027,” the IEA added.Even if global refinery operations begin to replenish towards the end of the year as predicted, it will still be insufficient to offset the losses seen so far in the markets for diesel, gasoil and jet fuel, the IEA warned.

The supply shortage is expected to remain tight in the first six months of 2027, with the squeeze only easing in the second half of the year, officials predicted.The pessimistic outlook comes as IAE members are set to meet on Thursday to discuss the next release of oil from their emergency reserves, with at least 331 million barrels distributed so far.

Diesel is widely used in industry, agriculture, and motoring across the globe, with its record-high prices creating political and economic pressures.In the US, the cost of diesel hit a record $6.52 per gallon last month and prices have remained stubbornly high, leading to tensions between the US and its European allies.President Trump had threatened a US diesel export ban against the European Union if it did not agree to release another 100 million barrels of diesel and crude oil from their strat...