Limited diesel supplies could persist until next year, as a significant depletion of inventories has coincided with constrained production ahead of winter, the peak season for demand, the International Energy Agency (AEI) said on Wednesday in its latest monthly oil market report.
Diesel refining margins - the difference between the price of diesel and that of crude oil - reached record highs of almost 95 euros per barrel in September, after reduced refining capacity, caused by attacks linked to the war in Iran, led to lower production, agerpres reports.
'Diesel markets have remained under significant pressure, as prolonged supply disruptions have depleted inventories, contrary to seasonal patterns, ahead of autumn refinery maintenance and the winter demand peak,' the AEI said.
According to the AEI, diesel supply fell by 1.7 million barrels per day in the third quarter, as the conflict in Iran restricted shipments through the Strait of Hormuz, a vital waterway for transporting large volumes of oil and refined products from the Gulf. Meanwhile, Russia, one of the world's largest exporters of refined fuels, was forced to cut diesel production following Ukrainian attacks on its refineries.
The Paris-based agency forecasts a recovery in global refining activity towards the end of this year, which should help inventories begin to rebuild. However, this will be insufficient to offset the shortfall accumulated during 2026.
IEA member countries are currently coordinating efforts to release 100 million barrels of oil and diesel from strategic reserves in an attempt to curb prices amid mounting political and economic pressures.
Diesel is an essential component of the global economy, powering lorries that transport food and manufactured goods, heavy machinery on construction sites and ships. It is also widely used for heating.
'Record diesel prices are already having far-reaching economic consequences, driving up the cost of goods and affecting real incomes, economic activity and inflation,' the AEI stressed.
The International Energy Agency is the leading energy policy advisory body for the world's 29 most developed countries. The organisation was established in response to the first oil shock of 1973-1974 to coordinate the release of oil from emergency reserves.
