A global diesel shortage could stretch well into 2027, the International Energy Agency warned Wednesday in its monthly oil market report. The agency expects supply to stay constrained through the first half of next year, with relief arriving only in the second half, the New York Post reported.
The agency measured the drop in diesel shipments from the Middle East and Russia at 1.3 million barrels in September alone. That shortfall works out to about 4.5 percent of the diesel and oil demand the IEA projects for this year, according to the New York Post. CNBC reported that wholesale diesel crossed $200 in Singapore during mid-September and touched record territory near $220 in Europe and the United States.
Demand forecast cut as prices climb
The agency also reduced its outlook for worldwide oil consumption. ABC News reported that the IEA now sees global use shrinking by roughly 2.6 million barrels daily in 2026, with diesel responsible for a quarter of that contraction. The agency projects a partial rebound next year, though total use would still sit 0.6 percent under 2025 levels.
Retail diesel prices have climbed to records in most major economies, the IEA said. In the United States, the fuel topped $6 for the first time last month, CNBC reported. The New York Post cited a higher peak of $6.52, and the reports do not reconcile the two figures. AAA data cited by ABC News put gasoline at $4.33 on Wednesday.
Attacks in the Gulf and a contested Russia deal
The IEA said fresh assaults across the Gulf region leave the market recovery fragile. CNBC reported that Yemen’s Houthis have carried out a string of strikes against Riyadh over the past week, some of them fatal, and that Saudi officials said an administrative building owned by Saudi Aramco was hit overnight.
President Donald Trump said last week that he struck an arrangement with Russian President Vladimir Putin under which Moscow would send a large quantity of diesel to world markets, CNBC reported. The arrangement drew criticism from both parties in the United States. European Commissioner for the Economy and Productivity Valdis Dombrovskis told reporters at the IMF meetings in Bangkok that “now is not a time to ease sanctions on Russia.” Italian Prime Minister Giorgia Meloni said the arrangement works against efforts to bring Putin to the negotiating table with Ukraine.
Several questions remain open. IEA members gather Thursday to weigh another draw on emergency stockpiles, and more than 331 million barrels have gone out so far, the New York Post reported. The Group of Seven plans to free up 100 million barrels of crude and refined products over the next few weeks, led by diesel, ABC News reported. It is not yet clear whether Russian cargoes will arrive in the announced amounts, whether Gulf attacks will ease, or when supply could start to exceed demand. The IEA warned that oil markets “may experience more turmoil” in the months ahead.
