Refined Oil Product Market Faces Severe Squeeze Amid Supply Disruptions
The global refined oil product market is facing a severe squeeze due to supply disruptions and seasonal demand. Global refinery throughput remains below last year's levels, with August throughput being 4.2 million barrels per day lower than in 2023, despite a monthly increase of 960,000 bpd.
Refinery activity in Russia and the Middle East continues to weigh on global product availability, with Russian refineries expected to fall by around 1.2 million bpd year-on-year in the third quarter due to Ukrainian attacks on energy infrastructure. Middle Eastern refinery activity is also expected to decline by around 1.7 million bpd due to regional tensions.
The squeeze is further exacerbated by high refinery utilization rates, especially in OECD countries, and upcoming seasonal maintenance. The International Energy Agency (IEA) reports that global refinery throughput is expected to average 81.5 million bpd in 2026, down 2.6 million bpd from 2025.
Rystad Energy's Janiv Shah states that refining margins are substantially above historical averages, with the strength concentrated in diesel and jet fuel. Diesel margins in Europe and the Mediterranean have reached record levels, while gasoline margins are also above historical averages but less unusually so.