It now seems more likely than not that some form of export restriction of US diesel will come into place ahead of the midterms which will exacerbate the ongoing diesel “shock”. Most refineries have limited capacity to further ramp up diesel supply, but governments could cushion the blow by releasing strategic reserves of diesel. In any case, if our assumption that Middle East oil product exports recover from early 2027 proves accurate, this will help to relieve some of the intense pressure in the diesel market next year.
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