Global diesel supplies drop as refinery disruptions drive oil prices higher

Global diesel and oil prices are surging due to military conflicts in Ukraine and the Middle East, which have severely disrupted refining capacities. Military strikes on refineries have impacted approximately 5 million barrels per day of refining capacity, removing roughly 8% of the global diesel supply from the market.

Crude oil prices have reached multi-week highs, with Brent crude rising to nearly $98 per barrel and WTI crude climbing to over $93 per barrel. This volatility is driven by escalating tensions between the United States and Iran, as well as reports of attacks on Saudi Aramco facilities and Ukrainian strikes on Russian refineries.

While some analysts suggest U.S. gasoline prices might see a slight reprieve in October due to the seasonal shift to cheaper winter blends, the outlook for diesel and heating oil remains grim. Low inventories in the U.S. and high seasonal demand are expected to keep prices elevated.

Countries heavily reliant on imports, such as Morocco, face significant economic pressure. Because Morocco imports 100% of its petroleum products, domestic diesel prices are projected to rise, potentially exceeding 18 dirhams per liter, which could trigger broader inflation in food and essential goods due to increased transport costs.