Diesel Shortage Set to Persist Through Winter Amid Russia Export Ban
Global diesel supply is expected to remain tight through winter due to various factors. The lack of spare refining capacity, Russia's ban on exports, and peak winter demand are contributing to this shortage. Senior industry executives, including Vitol CEO Russell Hardy and Mark Senn, senior vice president of global trading at Phillips 66, highlighted these concerns during the APPEC conference.
The wars in Ukraine and Iran have impacted refineries in Russia and the Middle East, pushing diesel margins to record levels in Europe and the US. This has led to a shortage of products, with Vitol's Hardy stating that crude is in a better supply position than products due to the Middle East exporting about 9 million bpd of crude and 1 million bpd of products.
US diesel prices have already jumped to record highs, and the product's crack spread surged to $108.02 a barrel on Wednesday. Hardy expects high prices and the lack of available fuel supplies to reduce global oil demand by about 1.5 million bpd in 2026 versus 2025.