Goldman Sachs predicts higher refining profits for diesel due to global supply shortages

Refinery outages are currently 60% higher than the seasonal average, with damage occurring in the Middle East and Russia. These outages have constrained global refining capacity and pushed refined-products margins to new highs. Diesel remains at the epicenter of this rally. Fuel exports from the Persian Gulf are running at some 40% of pre-war levels, while crude oil exports are estimated at 70-80% of pre-war levels. In the United States, refining margins for diesel are expected to reach $63 per barrel in 2027, and for refiners in the European Union are seen averaging $49 per barrel. These figures are higher than earlier forecasts of $27 per barrel for U.S. refiners and $19 per barrel for European Union refiners. In Europe, climate regulations have forced energy companies to shut down refining capacity. Russia has instituted a diesel export ban until the end of September to address production squeezes from Ukrainian drone attacks.