IEA Warns Diesel Shortages Will Persist Until Mid-2027 Amid Iran War Disruptions
The International Energy Agency (IEA) has warned that global diesel shortages will persist well into the second half of 2027 due to ongoing supply disruptions caused by tensions related to the war in Iran. The agency noted a significant drop in diesel exports, with year-on-year declines reaching 700,000 barrels per day in September and record-high wholesale prices observed across major markets like Singapore, Europe, and the U.S. The IEA attributed these constraints to unusually low inventory levels heading into peak winter demand. Despite a projected recovery in refinery output by late 2026, supply is expected to remain insufficient through Q4 of that year, delaying restocking efforts until mid-2027 at the earliest. The report also highlighted concerns over renewed Gulf attacks potentially derailing oil market stability. In response to rising prices, U.S. President Donald Trump announced a deal with Russia for 300,000 metric tons of diesel supply relief; however, the IEA noted this would have minimal macroeconomic impact given its limited scale relative to global demand.
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