IEA: diesel market tightness will persist for much of 2027 — Cyprus Mail

In Cyprus, pressure on fuel prices, transport costs and business expenses may persist until 2027 due to the tight situation on the global oil market. This was reported by Cyprus Mail, citing the latest International Energy Agency oil market report.

The IEA expects oil supply not to cover demand until the end of 2026, while a shortage of diesel and other middle distillates may continue for much of 2027. For Cyprus, which depends on imports of petroleum products, this means a risk of higher import costs and continued uncertainty over fuel prices.

Oil inventories are declining

At the end of September, recorded global oil inventories were 509 million barrels below their pre-war level, while onshore reserves fell to their lowest level since at least 2016. During September, total inventories decreased by approximately 10 million barrels: an additional 103 million barrels in offshore storage did not offset a 113 million-barrel decline in onshore stocks.

The agency noted that hostilities in the Middle East may continue to intensify energy market volatility until a supply surplus emerges in 2027.

More current news is available on the UA.News Telegram channel Telegram.

Diesel became more expensive due to export disruptions

The diesel market is of particular concern. In September, global exports of this fuel were 700,000 barrels per day lower than a year earlier. A 1.3 million-barrel-per-day reduction in supplies from the Russian Federation — an aggressor state — and Middle Eastern countries was only partially offset by additional volumes from other sources.

Exports of petroleum products from the Middle East remained below half of their pre-war level. In September, wholesale diesel prices exceeded $200 per barrel in Singapore and reached about $220 in Europe and the United States. Although prices later declined, they remain substantially above pre-crisis levels.

The IEA forecasts global oil refining throughput to increase from 81.3 million barrels per day in October to 84.6 million barrels per day in December 2026. According to the agency, the diesel market may return to a surplus in the first quarter of 2027, but a substantial replenishment of depleted inventories is not expected before the second half of the year.