The global diesel market is facing growing pressure on refining capacity, with tight inventories and lower flows of refined products from key regions. Goldman Sachs raised its forecasts for 2027 and estimates that fuel margins could reach USD 63 per barrel in the United States and USD 49 per barrel in Europe.
The adjustment reflects an increasingly significant difference within the energy market: having crude oil available does not necessarily guarantee a sufficient supply of fuels. Refinery disruptions and limitations in processing and transporting refined products are turning downstream capacity into a critical factor for maintaining supply balance.
Global diesel market faces lower refined product supply
The availability of processing capacity has become one of the main factors shaping the global diesel market, at a time when diesel prices in the United States are facing increasing pressure due to international refining constraints. Refinery disruptions are currently around 60% above the seasonal average, while international inventories remain under pressure.
The situation is particularly relevant because the impact on refined products is proving greater than on oil supply. While crude oil exports from the Persian Gulf are running at approximately 70% to 80% of their pre-conflict levels, fuel shipments remain at around 40%.
This difference highlights a downstream bottleneck: restoring oil flows does not automatically mean restoring the availability of diesel, gasoline, aviation fuel, and other refined products.
Goldman Sachs raises its forecasts for 2027
The changing conditions led Goldman Sachs to significantly revise its expectations. In the United States, the projected diesel margin for 2027 increased from USD 27 to USD 63 per barrel, while in the European Union it rose from USD 19 to USD 49 per barrel.
The new figures reflect the growing economic importance of available capacity to convert crude oil into marketable products, a trend already evident in refining margins in the United States, supported by lower international fuel availability. When operating refineries must supply a market with lower inventories and restricted supply, margins can widen even when crude oil remains available.
This dynamic also increases the strategic value of complexes capable of maintaining high utilization rates and processing different crude grades.
Refining capacity becomes a critical factor
The recovery of supply will depend largely on refinery availability and reliability. Facilities must maintain distillation, conversion, hydrotreating, and other units required to transform crude oil into fuels that meet commercial specifications.
In this context, unplanned shutdowns have a greater impact. A reduction in capacity in exporting regions can quickly spread to other markets through lower available volumes, competition for cargoes, and changes in trade routes. Conversely, increased capacity can reshape regional fuel flows, as demonstrated by the expansion of the Dangote Refinery and Nigeria’s refined product exports.
Europe also faces lower available capacity following the closure of various facilities in recent years, a factor that limits its ability to respond to new supply disruptions.
Diesel bears the brunt of downstream pressure
Diesel occupies a strategic position within industrial and logistics chains. Heavy transportation, mining, agriculture, construction, and various industrial operations depend on this fuel, meaning that a sustained reduction in its availability could extend its effects beyond the oil market.
Goldman Sachs believes the tightness could persist into next year. Adding to this situation, several refineries in the Middle East have experienced disruptions, while Russia maintains restrictions on its diesel exports amid reduced production capacity.
Refining gains importance in the energy balance
The behavior of the global diesel market shows that energy balance does not depend solely on how much oil can be produced or exported. The capacity to refine it and distribute its derivatives is becoming an equally decisive variable.
If disruptions persist and inventories remain tight, operating refineries could maintain elevated margins throughout 2027. The challenge for the sector will be to restore capacity, ensure facility reliability, and normalize refined product flows before the current bottlenecks place even greater pressure on global supply.
Source: Oilprice