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Conflicts in Iran and Ukraine Reduce International Supply as Empty Tanks, Record Prices, and Below-Average Reserves Indicate Challenges That May Persist Throughout Much of 2027
The global diesel market is facing a crisis that may extend through 2026 and continue into much of 2027. In the United States, stocks have fallen to 107.9 million barrels, the lowest level recorded for this time of year since 1982. At the same time, wars in the Middle East and Ukraine are disrupting international supply, while carriers and farmers are facing rising costs. The combination of reduced reserves and supply challenges is raising concerns among analysts, according to a report published by Reuters on September 21, 2026.
U.S. Records Lowest Stocks for September in 44 Years as Tanks Begin to Run Low on Fuel
Data from the U.S. Energy Information Administration (EIA) highlights the extent of the problem. As of September 11, the country maintained only 107.9 million barrels of diesel in storage, the lowest volume for this period since the beginning of the historical series in 1982.
However, another indicator has caught the attention of experts. The availability of rental tanks has increased just as the market needed to replenish its reserves.
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According to storage broker The Tank Tiger, the capacity available for lease in North America and the Caribbean rose from 11 million barrels in June to 13 million in October. This volume represents the highest level in four years.
The explanation reveals an unusual difficulty. Refineries and traders are not renewing storage contracts because they do not have enough diesel to fill the tanks.
Thus, the increase in available tanks does not mean that the market is hoarding fuel. On the contrary, it indicates that companies are struggling to maintain their inventories.
Steven Barsamian, operations director of The Tank Tiger, explained to Reuters that contracts typically last between six months and a year. Therefore, the decision not to renew these agreements suggests that market participants expect challenges at least through the first quarter of 2027.
The EIA presents an even longer outlook. The agency projects that American stocks of distillates, a category that includes diesel, will drop below 100 million barrels in September and remain lower than the lowest levels of the past five years throughout the remainder of 2026 and much of 2027.
Wars Disrupt Supply as Diesel Surpasses $6 Per Gallon in the United States
The reduction in stocks occurs as conflicts in Iran and Ukraine disrupt key supply routes.
According to Reuters, the wars are compromising the supply of millions of barrels per day of petroleum products from the Middle East and Russia. Additionally, restrictions on Russian exports and risks to energy facilities increase uncertainty about supply.
In the United States, diesel sold to consumers exceeded $6 per gallon in September, reaching an unprecedented level. The increase particularly pressures farmers, carriers, and companies that rely on heavy-duty vehicles.
The issue is already affecting operational decisions. The American company EcoBox Dumpsters, specializing in waste management, has begun to use smaller trucks when possible and to consolidate deliveries and pickups by region.
In this way, the company aims to reduce unnecessary trips and control fuel expenses.
The pressure also reaches the industry, which depends on energy and transportation to maintain its operations. In this context, the cost of energy inputs becomes significant, as do initiatives to reduce natural gas costs for large industrial consumers.
However, the crisis is not limited to the United States. In Europe, diesel stocks in the storage and refining hub of Amsterdam, Rotterdam, and Antwerp were 16% below the five-year average in July.
In Singapore, total distillate stocks registered an average of 8.2 million barrels in recent weeks, down from 9.6 million observed, on average, in 2025.
Thus, different regions are facing reduced reserves simultaneously, which limits the ability to quickly compensate for potential supply disruptions.
Refinery margins hit record high and China could ease supply, but recovery still depends on wars
Despite the supply pressure, the market shows some signs of potential recovery.
In the United States, the ultralow-sulfur diesel refining margin reached US$ 118.62 per barrel on September 14, according to data cited by Reuters.
This margin represents the difference between the price of diesel and the benchmark cost of crude oil. Therefore, high values could encourage refineries to increase production of the fuel.
Additionally, China has increased its diesel exports in recent months. Analysts believe that new Chinese shipments could help alleviate part of the international shortage.
However, recovery depends on factors that remain uncertain. An escalation of conflicts in Iran or Ukraine, new trade restrictions, or an unexpected refinery shutdown could trigger further price increases.
The scenario also reinforces the importance of alternatives for freight transport. Manufacturers such as Volvo are already developing long-range electric trucks for heavy operations, although these vehicles do not immediately replace the entire diesel-powered fleet.
In Brazil, the international crisis warrants attention, but it does not indicate widespread shortages. In September, rural producers in Rio Grande do Sul reported specific purchasing difficulties. However, the National Agency of Petroleum, Natural Gas and Biofuels (ANP) stated on September 15 that it did not identify a national shortage situation.
Thus, the prospect of scarcity until 2027 represents a risk for international markets, rather than a prediction of inevitable shortages in all countries.
Meanwhile, refineries, traders, and transport companies are monitoring the evolution of conflicts and the replenishment of stocks. Recovery will depend on the normalization of supply, increased production, and the capacity to rebuild reserves that have reached historically low levels.
