Global diesel exports fall 700,000 barrels a day; stockpile recovery not expected before 2027
Key Facts
Global diesel exports fell by about 700,000 barrels a day year on year in September, according to the International Energy Agency's October Oil Market Report, as refining and export bottlenecks persisted. Combined net gasoil exports from the Middle East and Russia fell by 1.3 million barrels a day compared with the same month a year earlier. Net exports from the two regions stood at 820,000 barrels a day, the agency said. By contrast, combined exports from the United States and China rose by 610,000 barrels a day year on year in September. But that increase failed to offset supply losses from the Middle East and Russia.
The supply shortfall reflects disruptions to exports and refinery output linked to the conflict in Iran, according to the IEA. Russian refineries were also damaged by Ukrainian attacks, adding pressure on refined product supplies. Output at some Asian refineries also declined, among the factors the agency identified behind the diesel shortage. An acute jet fuel shortage prompted refineries to increase kerosene production at the expense of gasoil yields, with some output directed toward aviation needs. Gulf export routes remained constrained when the report was published, according to The National, prolonging restrictions on supplies leaving the region.
U.S. diesel inventories ended September at their lowest seasonal level in 14 years, according to The National. In Europe, commercial gasoil stocks fell in July to their lowest level in 25 years. U.S. Energy Information Administration data showed distillate inventories stood at 105.1 million barrels in the week ended October 2. That was 13.5% below the level in the same period a year earlier, according to the agency's weekly report. On the U.S. East Coast, distillate inventories in September were 32% below their 5-year seasonal average, according to the agency's October outlook.
Wholesale diesel prices reached record levels of about $220 a barrel in Europe and the United States in September, according to The National. Prices had retreated from their peak by the time the IEA report was published in October. In the U.S. market, retail diesel prices averaged $6.29 a gallon in September, according to the EIA. The agency attributed the increase to higher crude oil prices and a wider spread between refined product prices and crude costs. It warned of a lag before improvements in the wholesale market reach consumers, saying "lower wholesale price spreads will not immediately translate into lower retail prices."
The decline in gasoil trade predates September, with global exports averaging 4.7 million barrels a day during the first nine months of 2026, according to The Wall Street Journal, citing the IEA. That represents a 10% decline from the same period a year earlier. In refining, the IEA warned that deteriorating profitability could prompt some refineries to cut runs. The warning covers marginally profitable facilities in Asia and Europe, where current operating rates could become uneconomic. The agency described the possibility as "economic run cuts," in a warning about refineries' ability to sustain production.
Over the coming winter, the EIA expects U.S. East Coast distillate inventories to remain below their 5-year average. The agency estimates the shortfall will range from 20% to 30% throughout the winter. The IEA, meanwhile, expects the gasoil and diesel market to return to a seasonal surplus in the first quarter of 2027. But that surplus will not make up for the accumulated inventory deficit beyond normal seasonal fluctuations. The agency does not expect depleted inventories to be replenished before the second half of 2027, according to its forecasts reported by The National.