Goldman Sachs Warns of Global Fuel Crisis Amid Middle East Wars

Goldman Sachs has issued a stern warning about the constraints in the global oil-refining market, citing wars in the Middle East and Russia's war against Ukraine as major contributors. The bank has more than doubled its forecasts for diesel-production profits, with refining margins reaching new highs due to refinery outages that are 60% above seasonal norms.

Diesel fuel remains at the epicenter of the surge, with product inventories falling despite some weakening in demand. The profit from producing a barrel of diesel fuel relative to Brent next year will average $63 in the United States and $49 in the European Union, compared to previous forecasts of $27 and $19.

The situation could worsen after Russia extended its ban on diesel-fuel exports through September, while demand is increasing in Brazil, the world's second-largest importer. The approach of winter in the Northern Hemisphere will also boost demand for heating fuel.