Global Diesel Shortage Set to Stretch Into 2027 as Inventories Run Low
Key Facts
The global diesel shortage is likely to extend into 2027 after the wars in Iran and Ukraine disrupted supplies from the Middle East and Russia, draining inventories and lifting fuel costs. The squeeze raises expenses for agriculture, manufacturing and heavy transport, sectors that depend directly on diesel.
U.S. diesel inventories fell to 107.9 million barrels on September 11, the lowest for that time of year since records began in 1982. The Energy Information Administration expects distillate stocks to drop below 100 million barrels in September and remain beneath the 5-year range, calculated over 2021-2025, through the end of 2026 and most of 2027.
The storage market indicates why the squeeze may persist rather than quickly reverse: diesel capacity available for lease in North America and the Caribbean rose to 13 million barrels for October from 11 million in June, a 4-year high. Because tank leases typically run for 6-12 months, rising vacant capacity alongside falling inventories suggests companies are not renewing space because too little fuel is available to store, signaling tight supply through at least the first quarter of 2027.
The price mechanism starts with the loss of the inventory buffer: a refinery or export disruption forces buyers to compete for fewer available barrels. The EIA expects global distillate production to remain below its 2025 level in coming months and U.S. diesel crack spreads to exceed $2 per gallon from August through November before easing through mid-2027, assuming tanker traffic through the Strait of Hormuz normalizes and exports recover; it also expects Russian refinery outages to affect the market through the first half of 2027.
Latest Updates · 3
- Major·
Update: The US national average for diesel reached a new record high of $6.51 per gallon as of September 21, 2026. This price surge is driven by mounting market fears regarding potential fuel export restrictions from both Russia and the United States, further tightening global supply.
- Notable·
Update: Global diesel prices have climbed to record highs, reflecting the immediate impact of inventory depletion on spot market costs. According to reports, further price increases remain possible as the structural imbalance between global supply and demand persists.
- Major·
Update: Global diesel prices have surged to record highs across European and U.S. markets as exports from major producers, including Russia, Saudi Arabia, and the UAE, have declined. This supply contraction is directly linked to escalating geopolitical conflicts in Iran and Ukraine, further intensifying the global distillates crunch.