Global Diesel Crunch Set to Last Well Into 2027

While crude oil imports in Asia have reached pre-war levels, imports of refined products remain weak as gasoline and diesel imports from the Middle East have crashed amid reduced refining capacity. Asia's oil import story these days is a reflection of the global oil marketscrude oil availability has significantly increased since the early summer lows and flows out of the Middle East have largely recovered, but supply of gasoline, and especially diesel, has sharply dropped since the Iran war began at the end of February.

Reduced refinery runs in the Middle East, with some refineries still out following Iranian strikes in the early days of the war, have combined with lower refined product flows through the Strait of Hormuz, due to the much more dangerous ship-to-ship transfers of highly inflammable…