Diesel Market Set to Worsen as Refining Capacity Falls Short, Industry Warns

Russell Hardy, chief executive of Vitol Group, described global fuel markets as "tight and inflexible," noting that even with increased crude flows from the Persian Gulf, only a fraction is refined products. Refinery capacity is hampered by Iranian strikes in the Middle East and Ukrainian drone attacks on Russian facilities, compounded by Russia's ban on diesel exports until at least the end of September.

Refineries in the United States and elsewhere have operated at maximum capacity throughout the summer, delaying essential maintenance. However, these elevated utilization rates are unlikely to be sustained for much longer. Shaikh Khaled Ahmad Al Sabah, managing director for international marketing at Kuwait Petroleum Corporation, suggested that maintaining current processing rates until year-end would be an achievement and predicted a "very difficult winter" for Northwest Europe, emphasizing that the current situation is "only the beginning."