Symbolic imageIEA warns diesel shortage will last well into 2027
The International Energy Agency said on Wednesday that diesel markets will stay tight well into 2027 because of Gulf supply disruption from the Iran war. Refiners stand to earn record profits.
In its monthly report on Wednesday, 14 October, the IEA said depleted inventories are unlikely to recover before the second half of 2027, according to The National. Combined diesel exports from the Middle East and Russia fell by 1.3 million barrels per day in September, and wholesale diesel hit about $220 a barrel in Europe and the US. The agency expects higher refinery output to bring a surplus by early next year, but not enough to refill stocks. If Gulf supplies do not recover soon, it warned, further demand cuts may be needed.
Stock release lags
About 96 million of the 400 million barrels of emergency stocks pledged in March have yet to be released, The National reports. G7 leaders pledged on 2 October to speed up the release and prioritise diesel.
Refiners cash in
Diesel refining margins reached a record of almost $95 a barrel in September, Handelsblatt reports. The Guardian reports that TotalEnergies' refining and chemicals income more than quadrupled to $1.8bn between April and June, and that Marathon Petroleum, Valero and Phillips 66 have more than doubled in market value since the crisis began.
Growth outlook cut
The IEA lowered its global growth forecast by 0.4 percentage points to 3 per cent as central banks raise interest rates against war-driven inflation. It says record diesel prices are raising the cost of goods and squeezing real incomes.