Goldman Sachs Forecasts High Diesel Prices Through 2027

Goldman Sachs forecasts that global diesel prices will remain high through 2027, predicting that diesel and jet-fuel crack spreads will average above $40 per barrel. This is more than double the typical $20 level. The bank argues that these elevated prices are necessary to maintain demand destruction and prevent recovering demand from overwhelming a strained refining system.

Refining capacity faces negative growth outside China, with significant offline facilities in Russia and the Middle East. Additionally, refineries in the United States require deferred maintenance after periods of elevated operation. While the Group of Seven recently agreed to release 100 million barrels of crude and refined products over four months to provide short-term relief, industry experts question the efficacy of the move.

Saudi Aramco CEO Amin Nasser, along with analysts from CLSA and Coface, argue that these emergency releases address immediate liquidity rather than structural supply issues. They suggest that such measures may actually delay the essential rebuilding of depleted inventories needed for long-term stability.