Diesel Shortages Overtake Crude as Global Oil Market’s Primary Risk

Refinery outages across the Middle East and Russia have triggered a sharp contraction in global fuel production, a void that increased output from the Americas and Africa has struggled to fill. According to Goldman Sachs, these regions have managed to recover only one-third of the lost supply. By July, global refining throughput plummeted by 6.5 million barrels per day compared to the same period in 2025, largely due to diminished Chinese run rates and infrastructure failures in conflict-affected zones.

Diesel sits at the center of this volatility. Global exports of the fuel fell by 2.6 million barrels per day this month—a 35% decline. As middle distillate inventories dip below seasonal averages, refining margins have surged to record highs, even as crude prices approach $100 per barrel. International Energy Agency executive director Fatih Birol recently noted that while crude deliveries are stabilizing, refined product supplies continue to lag, signaling a persistent and widening gap between raw oil availability and the fuel required for global logistics.