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The global diesel market is facing mounting supply pressure as the US-Iran conflict disrupts refined fuel shipments across the Persian Gulf. Although crude oil movements through the Strait of Hormuz have partially recovered, diesel exports have yet to rebound at the same pace, leaving international energy markets vulnerable to shortages and elevated prices.
Gulf diesel exports from Saudi Arabia, the United Arab Emirates, Kuwait, Bahrain and Oman reportedly declined from around 1.4 million barrels per day in 2025 to approximately 670,000 barrels per day in September 2026. That represents a fall of about 52%, highlighting the scale of disruption to the global refined fuel supply chain.
Why Is the Iran War Affecting Diesel Supply?
The Strait of Hormuz is a crucial route for Middle Eastern energy exports. Attacks on shipping and restrictions linked to the US-Iran conflict have disrupted tanker movements, making it harder for producers to deliver refined fuels to international buyers.
The gradual recovery in crude oil transit has not translated into an equivalent improvement in diesel exports. Shipping companies continue to face security risks, higher insurance premiums and rising freight charges. These constraints matter because diesel is essential for freight transport, agriculture, construction and industrial activity. Reduced availability can increase fuel costs and put additional pressure on businesses and consumers.
Russia-Ukraine War Adds to Global Fuel Pressures
The Russia-Ukraine conflict is affecting diesel supplies through a different mechanism. Ukrainian drone strikes have damaged Russian refineries, while Western sanctions have forced changes in established energy trading routes.
The Iran war, meanwhile, has placed greater pressure on transportation routes for Middle Eastern refined products. Together, the conflicts have reduced refining output and complicated fuel deliveries, contributing to tighter global supplies.
Oil Prices Remain Elevated Despite Mixed Trading
International crude benchmarks have continued to respond to competing signals about supply and demand.
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Brent crude: Settled at $105.69 per barrel, down 0.9%.
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WTI crude: Closed at $94.14 per barrel, up 0.4%.
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Longer-term contracts: Rising forward prices indicate persistent concerns about future supply availability.
The mixed performance of benchmark prices suggests that expectations of additional supply are competing with concerns about prolonged geopolitical disruption.
Can Russia’s Diesel Exports Ease the Shortage?
US President Donald Trump has said Russia would resume diesel exports to help stabilise the global market. However, the reported volumes remain modest compared with Russia’s previous export levels.
According to the figures cited in the report, Russian diesel shipments could reach slightly more than 100,000 barrels per day in October and around 125,000 barrels per day in November. Russia exported approximately 800,000 barrels per day of diesel last year. The proposed increase could provide some relief, but it is unlikely to fully compensate for the broader disruption to global refining and transportation capacity.
Rising Shipping Costs Add to Fuel Market Risks
Higher transportation expenses are further complicating the outlook for oil and diesel prices. Shipping costs for very large crude carriers travelling from the Middle East to China have reportedly climbed to around $35 per barrel, compared with approximately $3 at the beginning of 2026.
Freight costs from the US Gulf Coast to China have also increased sharply. Such expenses can reduce the benefit of recovering oil shipments by making deliveries substantially more expensive. Meanwhile, continued attacks and uncertainty around Gulf shipping routes are keeping energy traders alert to the possibility of further supply disruptions.
Oil Inventories and OPEC+ Decisions Under Scrutiny
Global oil inventories have also come under pressure during the conflict. The US Strategic Petroleum Reserve reportedly declined from approximately 415 million barrels before the war to 282 million barrels in early October 2026.
OPEC+ production decisions will be another important factor in determining whether additional output can offset supply losses. However, higher production alone may not resolve shortages if shipping routes remain unsafe or refining facilities continue operating below capacity.
What Could Happen to Global Diesel Prices?
The near-term outlook will depend on whether Gulf shipping stabilises, Russian diesel exports increase as promised, and OPEC+ production can compensate for disrupted supplies. A sustained recovery in refined fuel shipments could ease shortages. However, continued conflict around the Strait of Hormuz, damage to refining infrastructure and elevated transportation costs could keep diesel prices under pressure.
For now, the global energy market faces a difficult balance between potential supply recovery and persistent geopolitical risks.