Global Diesel Shortage Expected to Persist Into Mid-2027

A global diesel shortage is projected to continue into mid-2027, driven by a combination of geopolitical conflict and infrastructure decay. The International Energy Agency and Morgan Stanley warn that the market will remain tight as refiners begin long-overdue maintenance in the second quarter of 2027, which had been deferred to maximize immediate production.

The supply crunch resulted from Iranian strikes on Middle Eastern refineries and Ukrainian strikes on Russian refineries, alongside reduced fuel shipments through the Strait of Hormuz. While crude oil imports to Asia recovered to nearly pre-war levels in October 2026, reaching 26.39 million barrels per day, refined fuel imports remain 10% below pre-war volumes.

Market stability now depends on the recovery of Middle Eastern product supply and the export policies of China. Analysts at Sparta Commodities SA identify China as the primary uncertainty for Asian supply balances, noting that additional Chinese cargoes could loosen the market if approvals and loadings are clarified.