IEA: Diesel Market Tightness Set to Last Into 2027, With Stock Rebuilding Unlikely Before the Second Half

The International Energy Agency said in its October 2026 Oil Market Report, published on Wednesday 14 October 2026 (22 Mehr 1405), that global gasoil and diesel markets tightened counter-seasonally in the third quarter of 2026 and that the tightness will extend into 2027. The agency says disrupted exports from West Asia and Russia have drawn down stocks: wholesale diesel topped $200 a barrel in Singapore in mid-September and reached all-time highs of about $220 in Europe and the United States.

OECD gasoil stocks fell to 565 million barrels in July 2026, 5 percent below pre-conflict levels and the lowest since November 2023. Global gasoil output in the third quarter is estimated at about 27.2 million barrels a day, 1.7 million below a year earlier. On the demand side, diesel deliveries contracted by 750,000 barrels a day year on year in the third quarter, and the agency expects the annual fall in gasoil demand to widen to 1 million barrels a day in the fourth quarter.

The agency projects that a recovery in refinery runs will return the market to surplus in the first quarter of 2027, but not enough to offset the deficit accumulated during 2026, so replenishing stocks is unlikely before the second half of 2027. It says the outlook depends on a recovery of product supply from West Asia, failing which further demand cuts may be needed. The IEA added that the recent easing of Russian diesel export restrictions will not materially change the balance, because the binding constraint is a lack of operational Russian refinery capacity.