Diesel Prices Reach Record Highs as Global Market Struggles with Refining Capacity

The global diesel market is facing significant pressure due to disruptions in crude oil supplies and damaged refineries. The Middle East conflict has led to a shortage of refining capacity, causing diesel prices to surge at a faster rate than crude oil.

According to Jason Woosey, diesel prices have risen by R10.95 between March and September 2026, while petrol went up by R6.58 during the same time period. The global market is short about 10 million barrels of crude oil per day, leaving a substantial gap in a market that was consuming roughly 105 million barrels a day before the conflict started.

The initial disruption was particularly severe after Iran blocked the Strait of Hormuz, but some of the impact was initially absorbed when Saudi Arabia redirected part of its exports towards the Red Sea. However, stockpiles have cushioned the global oil market to some degree as many countries entered the crisis with commercial and strategic reserves.

Economist Paul Krugman has argued that the current energy crisis is increasingly a crisis involving refined petroleum products rather than crude oil itself. Western countries have banned imports of Russian petroleum products, while Russia has imposed fuel export restrictions. This has left countries competing for alternative sources, elevating prices.