IEA warns global diesel shortage could persist through next year

[Financial News] A warning has been issued that the global diesel supply crunch could drag on not only through next year but also into 2027. Concerns are growing that soaring diesel prices could fuel global inflation and weigh on global economic growth.
On the 14th (local time), the International Energy Agency (IEA) said in its monthly report, "The market is under severe strain, with diesel inventories continuing to decline despite this normally being a period when stocks rise, as supply disruptions persist."
The IEA said, "Diesel prices, which have surged to record highs, are already having broad economic repercussions, raising the cost of transporting goods and putting pressure on real incomes, economic activity and prices overall." Diesel is widely used across industry, agriculture and transportation, so price increases have a significant impact on the economy as a whole.
The IEA assessed that the market's ability to absorb shocks is gradually being depleted as military conflict in the Middle East remains unresolved. It forecast that turmoil in oil markets could continue over the coming months until an oversupply emerges around 2027, pushing the market beyond supply-demand balance.
The announcement came a day before a meeting to discuss the scale and timing of releases from IEA member countries' emergency oil reserves to stabilize energy markets.
With political and economic pressures mounting amid a sharp rise in diesel prices, the administration of U.S. President Donald Trump urged European Union (EU) countries to release their own oil stockpiles. The U.S. side reportedly went so far as to deliver a strong warning that it could ban exports of U.S.-produced diesel if the EU did not respond proactively.


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