Crude is back on the water. Up to a tenth of the world’s refining isn’t. Here’s what that means for anyone buying diesel, jet fuel or fuel oil into 2027.

If you only read the headlines, you’d think the worst was over.

Crude exports from Gulf countries were running above 23 million barrels a day in late September, close to their 2025 average, according to Goldman Sachs estimates. Tankers are moving. Barrels are back.

So why are fuel buyers from Lagos to Manila still struggling to get diesel? Why are some airports still short of jet fuel? Why does your supplier keep telling you “next week”?

Because crude isn’t the problem anymore. Saxo Bank’s head of commodity strategy, Ole Hansen, put it simply: “the main stress in the energy market is no longer crude availability… but rather refined product supply”.

Nobody runs a truck on crude oil. Or a plane. Or a generator. You need a refinery in the middle, and right now the world doesn’t have enough of them running.

The Bottleneck Nobody Was Watching

Analysts at the Dallas Fed estimate that 6 to 8 million barrels a day of refining capacity has been offline since late spring. That’s up to 10% of the world’s refining. Global refinery runs were 81.4 million barrels a day in August, 4.2 million below a year earlier.

And the outages hit an industry that was already stretched.

From 2015 to 2025, global refining capacity grew about 0.6% a year while demand for refined products grew 1%. In 2025 alone, product demand rose 1.3% while capacity actually shrank 0.3%. Europe has closed 35 refineries since 2009, cutting its capacity by about 20%.

Here’s the part that really explains it. The world can produce an estimated 110 to 113 million barrels a day of crude liquids against demand of about 103 to 105 million. But global refining capacity is only around 105 million barrels a day. Crude has a cushion. Refining has almost none.

There’s plenty of oil. There just isn’t enough room in the world’s refineries to turn it into the fuel people actually buy.

You Can See It In The Price

The gap between the price of crude and the price of diesel is called the crack spread. It’s basically what the market pays for refining. Normally it’s modest. Right now, it’s anything but.

Those figures come from Crux Investor, World Oil Monitor, the US Energy Information Administration and Goldman Sachs.

The Dallas Fed was clear on one thing: these prices reflect “acute, multifaceted supply constraints in the global market for refined fuels rather than retailer or distributor markup”. In other words, your supplier probably isn’t gouging you. The fuel really is scarce.

Don’t Expect A Quick Fix

Goldman Sachs expects diesel and jet fuel crack spreads to average more than $40 a barrel in 2027, and says refined-product inventories could end this year at their lowest days-of-supply level since at least 2015. The Dallas Fed thinks fuel will stay unusually expensive relative to crude even after shipping lanes normalize, because damaged refineries could take months to recover.

Refineries take years to build. You can’t just switch one on. So, this isn’t a two-week story. Plan for it to run into next year.

Who Runs Dry First? The Smaller Buyer.

Here’s the part that should worry every mid-size fuel buyer. Aviation analysts at Cirium found that no major airport hub has run out of jet fuel this year. The shortages hit the smaller airports first. As Cirium put it, “That is why the affected list reads Brindisi, Pescara, Yangon and Tahiti rather than Heathrow, Frankfurt or Changi”.

It’s the same story for diesel and fuel oil. When refined product is tight, refiners and big traders serve their largest term customers first. Spot buyers, smaller distributors and anyone working through a chain of brokers get what’s left. If there’s anything left.

How To Stay Supplied While Refining Is Tight

• Get closer to the refinery. The fewer hands between you and the refinery, the higher you are on the allocation list. Every middleman is another place your cargo can get bumped.
• Move from spot to term. Term contracts get served first in a squeeze. Even a 6- or 12-month agreement for part of your volume changes your position.
• Don’t rely on one origin. Supply that loads from several regions (Asia, the Americas, the Mediterranean) protects you when one corridor tightens.
• Lock the spec and the inspection. Tight markets attract off-spec product. Insist on independent inspection at loading.
• Price off a benchmark. A formula tied to Platts gives you a transparent price even when the market is moving every day.

How Petrolodex Helps Buyers Through the Refining Squeeze

This is exactly the situation Petrolodex is built for. We trade principal-to-principal, with no broker or middleman, through direct refinery relationships and national oil company partnerships across North America, South America, EMEA and Asia-Pacific. That means buyers deal with one counterparty that’s close to the source, not the fifth link in a chain.

Our current offers include EN590 diesel FOB from Malaysia’s Pengerang and Langsat terminals, EN590 10 ppm ULSD from US Gulf and Mexican loading points, long-term CIF ULSD, and Jet A-1 on 12-month CIF contracts, priced off Platts and US Gulf Coast benchmarks. Every source is authenticated before product is bought, cargoes are inspected by SGS or Intertek, and buyer funds are released only on verified transfer of product control.

In a market where refined fuel is the scarce part, being one step from the refinery isn’t a nice-to-have. It’s what keeps your tanks full.

The Bottom Line

The oil is back. The fuel isn’t, not fully, and probably not for a while. Refining capacity is the real constraint, it won’t fix itself quickly, and the buyers who get squeezed hardest are the ones furthest from the refinery. Shorten your chain, secure term volume, and work with a supplier who can actually reach the product.

Get a free Supply Security Check

Tell us your destination, monthly volume and product grade. Our desk will come back with a term structure and loading origin options that fit your requirement, at no cost and with no obligation.

Request your Supply Security Check or email info@petrolodex.com.

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Frequently Asked Questions

Why are fuel prices still high if crude oil is flowing again?

Because the shortage has moved from crude oil to refined products. As much as 6 to 8 million barrels a day of refining capacity, up to 10% of the global total, has been offline since late spring 2026, so there isn’t enough capacity to turn available crude into diesel, gasoline and jet fuel.

What is a diesel crack spread?

It is the difference between the price of diesel and the price of the crude used to make it, which reflects what the market pays for refining. The US Gulf Coast diesel crack rose from $28.62 a barrel in January 2026 to $107.90 in September 2026.

Is there a global diesel shortage in 2026?

Refined fuel supply is tight worldwide. Global refinery runs were 4.2 million barrels a day lower in August 2026 than a year earlier, US East Coast distillate stocks were 32% below their five year average in September, and Gulf exports of diesel, gasoline and jet fuel were about half their 2025 average.

How long will the refined fuel squeeze last?

Analysts expect it to run into 2027. Goldman Sachs forecasts diesel and jet fuel cracks above $40 a barrel in 2027, and the Dallas Fed expects fuel to stay expensive relative to crude even after flows normalise, because damaged refineries can take months to recover.

Why do smaller buyers run out of fuel first?

Refiners and major traders serve their largest term customers first when supply is tight. Spot buyers and smaller distributors, especially those buying through several intermediaries, sit lower on allocation lists. Cirium found jet fuel shortages hit regional airports while no major hub ran dry.

How can a business secure diesel or jet fuel supply in a tight market?

Buy as close to the refinery as possible, move part of your volume from spot to term, diversify loading origins, insist on independent inspection at loading, and use benchmark linked pricing such as Platts.

Does Petrolodex act as a broker?

No. Petrolodex trades principal to principal through direct refinery relationships and national oil company partnerships across North America, South America, EMEA and Asia Pacific. Buyers deal with one accountable counterparty.