Goldman Sachs said diesel prices may remain high until 2027 due to limited refining capacity, rising demand, and the impact of additional inventories by governments and companies. Nikhil Bhandari, co-head of Goldman Sachs Asia-Pacific Natural Resources Research, said on Monday: “We need to keep the price of refined oil products at a high enough level so that demand can continue to be suppressed to a certain extent next year.” The bank believes that maintaining high diesel prices is a necessary measure to prevent recovering demand from crushing already limited refining production capacity. Goldman Sachs predicts that the global average cracking price difference between diesel and aviation coal will be higher than $40 per barrel in 2027, which is more than double the conventional level of about $20. Meanwhile, Goldman Sachs expects the price of Brent crude oil to stabilize around $80 per barrel with the recent gradual resumption of crude oil transportation in the Strait of Hormuz. Bandari said, “If there is any rebound in demand next year, the global refining system will have to reach the highest operating rate in the past 20 years.”

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