Global Diesel Shortage Driven by Iran and Ukraine Conflicts Expected to Persist Into 2027

U.S. retail diesel prices topped $6 a gallon in September 2026 for the first time, as a global shortage fueled by conflicts in the Middle East and Ukraine shows no sign of easing, Reuters reported on September 21, 2026. U.S. diesel stockpiles stood at 107.9 million barrels as of September 11, the lowest for that calendar date since the Energy Information Administration began record-keeping in 1982. The EIA projects distillate fuel oil inventories will stay below the five-year low through 2026 and most of 2027, with retail diesel averaging $5.55 a gallon in Q4 2026 and $4.40 in 2027. Middle East tanker disruptions near the Strait of Hormuz and Ukrainian strikes on Russian refining capacity have cut crude flows and refinery output, with Russian outages expected to affect the global distillate market through the first half of 2027. European and Asian inventories are also strained; Amsterdam-Rotterdam-Antwerp levels ran about 16% below the five-year average in July. Analysts warn that further conflict escalation or unexpected refinery outages could push prices sharply higher.