The International Energy Agency said on Wednesday that the worldwide diesel shortage would extend into 2027 despite plans to ease trade sanctions or release emergency stockpiles. The warning came days after Donald Trump announced a deal to import Russian diesel into the US to tackle soaring pump prices. The shortage stems from damage to refineries in the Middle East and Russia, combined with export restrictions from China. Diesel supplies into the global market have fallen by about 1 million barrels a day from 2025 levels.
For the global economy, the squeeze is painful. The IEA said record diesel prices are already raising the cost of goods and impacting real incomes, economic activity and inflation. Diesel, known as a "workhorse" fuel, powers equipment vital to agriculture, mining, manufacturing, shipping and logistics. Economists worry about broader impacts, with pressure mounting on US farmers and bus operators in England.
However, major refineries are capturing record profits from the crisis. TotalEnergies said its refining and chemicals business income more than quadrupled to 1.8 billion pounds between April and June. The market value of three largest US refiners - Marathon Petroleum, Valero Energy and Phillips 66 - has more than doubled since the crisis began, with combined share gains of 215 billion dollars this year. Shell expects record profits from each barrel of fuel produced, with refining margins forecast to nearly double to 42 dollars per barrel.
Some refineries have adapted better than others. BP shifted production to meet changing demand, producing 30 percent more jet fuel in May than before the conflict and adjusting back to maximise diesel output. However, many refiners producing petrol and naphtha, where prices remain far below diesel highs, are shouldering crippling costs. The IEA suggested a diesel surplus could emerge by early next year, potentially creating gasoline shortages instead.