Diesel supplies to remain ‘tight’ into 2027: IEA

Governments have responded by reducing fuel taxes or providing subsidies and by releasing strategic reserves that will need to be replenished.(AFP) — Diesel supply disruptions in the Persian Gulf stemming from the U.S. war against Iran will keep the market tight into 2027, the International Energy Agency said Wednesday, as rebuilding depleted stocks will take time.“The gasoil market balance will remain tight well into 2027 and is dependent on a recovery of product supply from the Middle East,” the Paris-based agency said in its monthly energy markets report.Diesel prices have hit record highs across Europe and in the United States in recent weeks because of both reduced oil exports from the Gulf and damage to refineries in the region from retaliatory attacks by Iran.Governments have responded by reducing fuel taxes or providing subsidies and by releasing strategic reserves that will need to be replenished.The IEA predicted that refining capacity will recover, leading to a surplus in 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 U.S. and Israel launched strikes against Iran in late February, sending energy prices soaring around the globe.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.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads