Written by: Salma El-Sakka
Financial and global institutions' forecasts indicate that global fuel markets will continue to suffer from supply tightness until at least mid-2027. This continued supply pressure is a result of planned and delayed refinery maintenance operations, which have been postponed from the current period to cope with high demand and the continued flow of products.
Peak Maintenance Operations in 2027
Analysts at Morgan Stanley expect planned maintenance work in oil refineries around the world to peak at 3.4 million barrels per day during the second quarter of 2027. Many facilities will have exceeded their usual maintenance schedules after operating at maximum capacity for extended periods. In recent months, numerous refineries delayed scheduled shutdowns to ensure continued fuel flow in a market experiencing high refining margins.
The expected decline in refinery utilization during the second quarter of next year will be one and a half times the usual capacity typically taken out of service during spring maintenance globally. Analysts emphasized that refinery maintenance operations cannot be postponed indefinitely, as the volume of these shutdowns has increased over time after second-quarter indicators already looked crowded with shutdowns.
Continued Diesel and Gasoil Crises
For its part, the International Energy Agency confirmed in its monthly oil market report that the tightness crisis in diesel and gasoil markets will continue until the middle of next year. The agency pointed out that declining inventories, high refining margins, and backwardation pricing levels signal an urgent need for additional supplies to meet global demand.
Despite global diesel prices declining from their record levels exceeding $200 per barrel last September, standard diesel benchmarks remain at twice the price of crude oil and pre-crisis levels. Reports indicate that replenishing lost inventories, outside the scope of normal seasonal fluctuations, seems unlikely before the second half of 2027, keeping pressures ongoing on global markets.
