Global Diesel Shortage Expected to Persist Through 2027

While refineries in the United States and elsewhere are operating at maximum capacity, they cannot compensate for the dual loss of output from the Middle East and Russia. Facilities have deferred maintenance for months to keep pace with demand, but this strategy is reaching a breaking point; further delays risk catastrophic equipment failure and unplanned shutdowns. Even as crude oil flows through the Strait of Hormuz show signs of stabilization, refined fuel exports remain hampered by security concerns and a reliance on smaller, less efficient tanker vessels.

The impact is particularly acute regarding specific infrastructure. Saudi Aramco’s 400,000-barrel-per-day Jizan refinery remains offline following multiple strikes, while Bahrain’s Bapco facility is only partially recovered. These regional gaps, compounded by a sharp reduction in Russian exports, have left the market vulnerable. A recent agreement to ship 300,000 barrels of Russian ultra-low sulfur diesel to the United States has been dismissed by experts like Qamar Energy’s Robin Mills as a negligible gesture, amounting to less than one-tenth of daily U.S. consumption.

Looking ahead, Morgan Stanley analysts warn that the second quarter of 2027 will likely exacerbate the situation as refiners finally undertake the massive maintenance projects they have postponed. This expected drop in global utilization is projected to exceed the current capacity lost in Russia and the Middle East combined. With national diesel prices in the United States hovering near record highs—nearly $1 per gallon above 2022 levels—policymakers face a persistent crisis that has rendered traditional relief measures largely ineffective.