The International Energy Agency (IEA) expects diesel stock recovery to take until at least the second half of 2027, with a fourth-quarter gasoil shortfall still forecast. Gasoil is a market category that includes diesel.
The IEA's October oil market report puts global diesel exports in September 700,000 barrels per day below the same month a year earlier. Combined net exports from the Middle East and Russia dropped by 1.3 million barrels per day to 820,000 barrels per day. Higher shipments from the United States and China added 610,000 barrels per day, only partly offsetting those losses.
Separate indicators show that crude and refined-product flows have not moved in step. Gulf crude exports reached 13.9 million barrels per day in September, more than 75% of prewar levels, while total oil flows through the Strait of Hormuz reached 10.9 million barrels per day. Middle Eastern shipments of refined products remained below half of prewar levels.
The IEA forecasts refinery runs at 81.3 million barrels per day in October, a seasonal low, before recovering to 84.6 million barrels per day by year-end. The Organisation for Economic Co-operation and Development (OECD) had 565 million barrels of gasoil stocks in July, 5% below pre-conflict levels. That was the lowest level since November 2023, when inventories were still rebuilding after the 2022 energy crisis.
The agency forecasts global oil demand will fall by 2.6 million barrels per day in 2026, with diesel accounting for one-quarter of the decline. It said expensive diesel is making goods costlier and reducing household purchasing power, with further pressure on economic activity and inflation.
In the IEA's assessment, resuming transit through Hormuz is the priority for stabilizing oil and gas flows. More than 20 million barrels of diesel are among the remaining emergency volumes governments agreed to expedite. Member governments reported that about 330 million barrels had been released under their March collective action by Oct. 15. The IEA also estimates that improved driving and delivery practices could lower commercial road-vehicle fuel use by 3% to 5%; that estimate applies to the sector's fuel use, not diesel alone.
The U.S. Department of Energy announced plans Oct. 22 to offer up to $150 million under the Defense Production Act for domestic petroleum production, storage and refinery logistics. The department expects the funding to increase U.S. refining output by millions of gallons per day, while project selection remains underway.
The U.S. Energy Information Administration (EIA) reported an average on-highway diesel price of $6.276 per gallon, including taxes, for the week of Oct. 19. The EIA's next weekly release is scheduled for Oct. 27.
