Global diesel supply will remain constrained in winter
Global diesel fuel supply will remain constrained throughout the winter season due to a shortage of spare refining capacity, an export ban imposed by Russia, the aggressor state, and the approach of peak seasonal demand. Industry executives said this at the APPEC conference, Asharq Al-Awsat reports.
Shortage of petroleum products
Russell Hardy, chief executive of trading company Vitol, said the market is experiencing a shortage primarily of petroleum products, although the crude oil supply situation is better. According to him, the market is receiving around 2 million barrels per day less from Russia and nearly 2 million barrels per day less from the Middle East.
Hardy noted that Middle Eastern countries export around 9 million barrels of crude oil and 1 million barrels of petroleum products per day. In his assessment, the available refining capacity is insufficient to stop the decline in global fuel inventories, which are already nearly depleted.
Prices and winter demand
The wars in Ukraine and Iran have affected the operations of refineries in Russia and the Middle East. This has pushed diesel refining margins to record levels in Europe and the United States, while also reducing crude oil supplies to Asia.
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Mark Senn, senior vice president of global trading at Phillips 66, said that most U.S. refineries are already operating at full capacity. In his view, tight diesel inventories ahead of winter could support the resilience of this fuel market.
At the end of last week, diesel prices in the United States reached record levels. The diesel crack spread, an indicator of refining profitability, rose to an intraday record of $108.02 per barrel.
Hardy expects high prices and a shortage of available fuel to reduce global oil demand in 2026 by around 1.5 million barrels per day compared with 2025. He also considers unsustainable the 5–6 million barrels per day gap between China's crude oil import volumes in 2025 and 2026, and expects it to narrow by the end of the year so that the country has enough fuel for winter.
