Diesel supply disruptions in the Gulf stemming from the US war against Iran will keep the market tight into 2027, the International Energy Agency said Wednesday, as it will take time to rebuild depleted stocks.
The gasoil market balance will remain tight into 2027 and is dependent on a recovery of product supply from the Middle East, Paris-based agency said in its monthly energy markets report.
IEA predicted that refining capacity will recover and lead to a surplus on the diesel market in the first quarter of next year, “lifting stocks broadly in line with normal seasonal patterns”.
But that will not fully compensate for the deficit accumulated since the US and Israel launched strikes against Iran in late February, which sent energy prices soaring around the globe.
And if Gulf supplies do not return to normal levels soon, “further demand reductions and the heavy economic costs these will entail may be needed to balance markets”, the IEA warned.
