Global Fuel Oil Shortage Hits 218,000 Barrels Daily
Energy Aspects forecasts a severe global fuel oil deficit driven by refinery damage in Russia and the Middle East and a shift toward diesel production.
A global shortage of ship and power plant fuel oil is emerging in the third quarter of 2026, with Energy Aspects forecasting a deficit of 218,000 barrels per day. This represents a sharp increase from the 6,000-barrel daily shortage recorded in 2025. The crisis is driven by concurrent conflicts in Europe and West Asia, including a war between the United States, Israel, and Iran that has paralyzed the Strait of Hormuz and led to attacks on Gulf oil facilities. The International Energy Agency estimates these hostilities have eliminated approximately 9.6 million barrels of daily refining capacity.
Supply is further constrained by Ukrainian drone attacks on Russian refineries, which drove Russian fuel oil exports to a record low of 591,000 barrels per day in August. In response to these attacks, the Federal Government of Russia banned diesel exports, tightening global supplies. This has incentivized refiners to prioritize higher-value products like diesel, gasoline, and jet fuel. For instance, Nigeria's Dangote Petroleum Refinery & Petrochemicals Fze has increased exports of these fuels while reducing fuel oil output.
Asia is projected to be the hardest-hit region due to its reliance on Gulf flows. Fuel oil stocks in Fujairah and the Amsterdam-Rotterdam-Antwerp region have dropped roughly 30 percent below seasonal averages. In Singapore, the price of very low sulphur fuel oil has risen 76 percent since the start of the war on Iran, reaching nearly $825 a metric ton as of September 1. Analysts warn these shortages could increase global freight costs and disrupt international supply chains.
