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Market Chatter: Global Diesel Supply to Remain Tight Through Winter

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The global supply of diesel is expected to remain tight through winter as exports from Russia and the Middle East dwindle due to conflicts, while spare refining capacities remain limited, Reuters reported Tuesday, citing industry executives.

Vitol chief executive Russell Hardy reportedly said during the Asia Pacific Petroleum Conference that the wars have reduced product supply by 2 million barrels per day from Russia and another 2 mmbbls/d from the Middle East, while refining capacity in other regions could not compensate.

In the US, most refineries are already running at full capacity, according to the report, which cited Mark Senn, senior vice president of global trading at Phillips 66 (PSX). Senn noted that entering the winter season with low diesel stocks could further strengthen the market, which saw record-high diesel prices in the US last week.

Hardy reportedly said that high prices and tight supplies could cut global oil demand by about 1.5 mmbbls/d this year versus 2025 levels. Meanwhile, the International Energy Agency projected last month that demand could decline by 1.6 mmbbls/d, with latest forecasts requested by.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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