Limited diesel supplies could persist into next year, as a significant drop in inventories coincided with constrained production ahead of winter—the peak demand season—the International Energy Agency (IEA) announced on Wednesday in its latest monthly oil market report.
Diesel refining margins—the price spread between diesel and crude oil—hit record highs of nearly $95 per barrel in September after reduced refining capacity, caused by war-related attacks, led to a drop in output, according to Agerpres.
“Diesel markets have remained under significant pressure as prolonged supply disruptions led to stock draws—contrary to seasonal patterns—ahead of autumn refinery maintenance and the winter peak in demand,” the IEA stated.
According to the IEA, diesel supply fell by 1.7 million barrels per day in the third quarter because the conflict involving Iran restricted shipments through the Strait of Hormuz—a vital waterway for transporting large volumes of oil and refined products from the Gulf—while Russia, one of the world’s largest exporters of refined fuels, was forced to cut diesel production due to Ukrainian attacks on its refineries. The Paris-based agency forecasts a recovery in global refining activity towards the end of this year, which should help kickstart stock replenishment; however, this will be insufficient to offset the deficit accumulated during 2026.
Currently, IEA member states are coordinating efforts to release 100 million barrels of oil and diesel from strategic reserves onto the market, in an attempt to temper prices amidst mounting political and economic pressures.
Diesel is a vital component of the global economy, fueling the trucks that transport food and manufactured goods, heavy machinery at construction sites, and ships. It is also widely used for heating.
“Record diesel prices are already causing widespread economic consequences, driving up the cost of goods and impacting real incomes, economic activity, and inflation,” the IEA noted.
The International Energy Agency is the primary energy advisor to 29 of the world’s most developed nations. The organization was established in response to the 1973–1974 oil shock to coordinate the release of oil from reserve stocks.