IEA Warns Diesel Shortage Will Persist Until Mid-2027 Despite Russian Deal
The International Energy Agency (IEA) projects that global diesel supply constraints will continue through the second half of 2027, driven by severe inventory depletion and weak demand elasticity. Although refinery output is recovering, the loss of 1.3 million barrels per day from Russia and the Middle East has not been fully offset by other sources. Wholesale prices have hit record highs, exceeding $220 per barrel in Europe and the US, while retail prices in the US reached $6 per gallon in September. The IEA noted that a recent deal between the US and Russia for 300,000 metric tons of diesel is unlikely to have significant macroeconomic impact, as the volumes are too small to address the broader deficit. Renewed attacks in the Gulf, including strikes on Saudi Aramco facilities, further threaten the fragile recovery of oil supply.