Global diesel supplies are expected to remain tight through the winter as limited refining capacity combines with Russia’s export restrictions and the approaching peak-demand season.
Senior industry executives said the wars in Ukraine and Iran have affected refineries in Russia and the Middle East, pushing diesel margins to record levels in Europe and the United States while reducing crude supplies reaching Asia.
Vitol CEO Russell Hardy said the market is missing about 2 million barrels per day from Russia and nearly 2 million barrels per day from the Middle East.
He said crude supplies were in a stronger position than refined products, with the Middle East exporting about 9 million barrels per day of crude and 1 million barrels per day of products.
Phillips 66 senior vice president of global trading Mark Senn said most U.S. refineries were already operating at full capacity. He warned that low diesel inventories heading into winter could keep fuel markets under pressure.
U.S. diesel prices reached record highs late last week. The crack spread, which measures refining profitability, reached a record intraday level of $108.02 a barrel on Wednesday.
Hardy said elevated prices and limited fuel availability could reduce global oil demand by about 1.5 million barrels per day in 2026 compared with 2025.
He also said the difference between China’s crude imports in 2025 and 2026, estimated at 5 million to 6 million barrels per day, was unsustainable and expected to narrow toward the end of the year as China prepares for winter fuel demand.
Original article
Comments