Crude oil has 'returned', but refined products have not—global refining capacity gaps are widening.

Crude oil is re-entering the market via dark ships and alternative shipping routes, yet the downstream refining capacity gap cannot be bridged by logistical means alone. In response, Goldman Sachs has sharply raised its 2027 diesel margin forecasts, locking in a long-term outlook of 'higher and longer-lasting' diesel premiums. In its report dated August 29, Goldman Sachs revised its 2027 U.S. diesel-to-Brent crack spread forecast upward from $27 per barrel (as projected in February) to $63 per barrel; for Europe, the forecast was raised from $19 to $49 per barrel—both more than double their prior estimates. This revision stems directly from a roughly 6-million-barrel-per-day (approximately 25%) year-on-year decline in global refined product exports: the Persian Gulf accounts for 3.2 million bpd, and Russia for 1.1 million bpd—collectively representing about three-quarters of the global shortfall. The report notes that Persian Gulf crude oil exports have rebounded to 70–80% of pre-war levels, whereas refined product exports remain at only ~40%. Goldman Sachs expects global refinery utilization rates to return to normal only in the second half of 2027, meaning diesel’s structural shortage will persist—and continue pricing in—for an extended period. Crude oil has 'returned'; refined products have not. Persian Gulf crude oil exports have recovered to 70–80% of pre-war levels, while refined product exports remain stuck at ~40%. Goldman Sachs estimates actual Persian Gulf crude oil exports at approximately 15–16 million barrels per day—5–6 million bpd higher than March’s lows—and notably above real-time tanker tracking data. Increasing numbers of tankers are disabling AIS transponders and conducting ship-to-ship transfers; Iran and Oman are advancing a temporary shipping corridor through the Strait of Hormuz, and Gulf producers are expanding alternative routes bypassing the Strait. This divergence has emerged between crude and refined products: global crude oil exports declined only ~10% year-on-year, whereas diesel, jet fuel, and fuel oil exports fell by 22%, 20%, and 32%, respectively.

Seasonal demand surges have caused diesel shortages and sharp price spikes. Is a turning point imminent?

Conversely, demand outside China has remained exceptionally robust across the region. Heavy rains and flooding in China have hampered construction activity, while the South China Sea fishing ban has further dampened diesel demand. Elsewhere in Asia, diesel demand remains strong despite rising prices. Governments across the region—including South Korea (fuel subsidies), Australia (tax cuts), and Thailand (retail price caps)—are implementing measures to ease fuel-driven inflation pressures, widely viewed as critical to economic stability. Robust demand has tightened supply, pushing regional diesel crack spreads to multi-year highs and forcing the East-West arbitrage window shut. As logistics flows to the West diminish, Singapore’s middle distillate inventories have recently begun rebounding—hinting at early signs of easing regional tightness. Meanwhile, diesel supplies to Europe from Russia and the Middle East are also increasing. Several European countries—including Germany, Italy, and Spain—boosted Russian diesel imports in June; the EU’s sixth round of sanctions on Russia may further bolster traders’ confidence in handling Russian spot cargoes before year-end. While Europe is reducing diesel exports and increasing net imports, it is unlikely to rapidly rebuild diesel stocks amid the current strong spot market contango. Latin American and Mexican diesel demand surges push U.S. diesel exports to record highs Across the Americas, surging diesel import demand—particularly from Mexico and other Latin American nations—has lifted diesel exports from the U.S. Gulf Coast in June to levels matching the multi-year high seen in April, simultaneously drawing down regional diesel inventories. Mexican refineries have suffered repeated outages—first Salina Cruz, most recently Cadereyta—leaving the country urgently dependent on diesel imports. Consequently, Mexico’s diesel imports remain at a historic high of 280,000 barrels per day, with expectations that the second refinery outage next month will provide further upward pressure. Across Latin America, strong agricultural demand and winter diesel stockpiling needs are intensifying competition for U.S. diesel imports—just as refiners prioritize maximizing jet fuel output (over diesel) amid surging jet fuel trading volumes. Peru’s total diesel imports surged sharply in June, reaching at least a four-year high, while Ecuador’s imports hit an eight-month peak. However, buyers may find some relief: the region’s harvest season is nearing its end, and demand is expected to cool—potentially easing market tightness.

Chile’s Largest Refinery to Undergo Work Amid Diesel Crunch

19 hours ago

Chile's state oil company Enap will halt part of its Bio Bio refinery for 40 days starting October, worsening a global diesel shortage. The maintenance impacts fuel supplies critical to Chile's copper mining sector as importers seek alternatives amid geopolitical tensions.

bloomberg

2026-09-29

Chile’s Largest Refinery to Undergo Work Amid Diesel Crunch

Chile’s Largest Refinery to Undergo Work Amid Diesel Crunch

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