Global diesel supplies tighten amid refinery attacks and export bans

Global diesel supplies are tightening significantly due to a combination of refinery disruptions and export bans. Attacks on energy infrastructure, including a Ukrainian strike on a refinery in Russia’s Tatarstan region and Houthi strikes on the Jazan refinery in Saudi Arabia, have removed substantial volumes of diesel from the market.

In response to drone attacks on its refineries, Russia has banned diesel exports until January 2027. Meanwhile, the United States is seeing record-high diesel exports, with inventories of distillate fuels at their lowest levels for this time of year in three decades. These factors are driving up prices, with U.S. ultra-low sulfur diesel futures rising 7.4% on a recent Monday.

The supply squeeze poses risks to various sectors, including agriculture, construction, and transport. Europe is particularly vulnerable due to the loss of Russian-linked fuels and ongoing refinery closures driven by emission reduction rules. Analysts warn that the crunch could lead to extremely high prices and political pressure as demand increases during upcoming peak seasons.