The global diesel market faces a prolonged shortage and high prices through 2027 amid conflicts in Iran and Ukraine

The global diesel shortage is unlikely to ease before 2027, market participants cited by Reuters estimate. Conflicts in Iran and Ukraine have disrupted supplies, reduced inventories and pushed prices to record levels, affecting agriculture, industry and heavy transport.

In the United States, the retail price of diesel surpassed six dollars per gallon for the first time. U.S. inventories fell to 107.9 million barrels on September 11, the lowest level for this time of year since data collection began in 1982.

Signs of a prolonged crisis are also visible in the storage market. Available diesel storage capacity in North America and the Caribbean reached 13 million barrels for October, as operators are no longer renewing their contracts: there is not enough fuel to store.

The Energy Information Administration estimates that U.S. inventories will remain below the five-year minimum through the end of 2026 and for most of 2027. In Europe, inventories at the Amsterdam-Rotterdam-Antwerp hub were 16% below the five-year average in July.

Supply could remain limited throughout the winter, particularly if tensions in the Middle East worsen and Russia's ban on diesel exports remains in place. Higher exports from China could ease the pressure, but new attacks or refinery problems could trigger rapid price increases.