The Zhitong Finance App learned that Morgan Stanley believes that even if current war-related supply disruptions ease, the global refined oil market may continue to be tight until mid-2027. The reason is that “an abnormal increase in refinery maintenance” will limit global supply.
Morgan Stanley analysts Martijn Rats and Charlotte Firkins and others said in a report released on Tuesday that by the second quarter of next year, the planned shutdown of global refineries will increase by 3.4 million b/d. This figure is 2.5 times the normal level, and is also higher than the current reduction in production at refineries in the Middle East and Russia.
The report points out that in the context of the war in the Middle East that has continued for nearly eight months and Russia and Ukraine have recently stepped up attacks on each other's energy infrastructure, the global market is facing a tight fuel supply. For fuels such as diesel, the sharp decline in exports has driven prices far higher than crude oil.
The refinery delayed maintenance in order to take advantage of strong profit margins. However, analysts at Morgan Stanley pointed out that maintenance work “cannot be postponed indefinitely.” They added that the second quarter of 2027 “originally showed a trend of extensive maintenance and discontinuation of production, and this situation is getting worse as time goes on.” Furthermore, “refinery operating rates may be difficult to recover” at that point.
A number of agencies warn of tight diesel supply
In addition to Morgan Stanley, the International Energy Agency (IEA) and Goldman Sachs have recently issued separate warnings about the diesel market.
The International Energy Agency (IEA) released a report last week saying that due to factors such as continued blockage of diesel exports from the Middle East and Russia, the tight supply situation in the global diesel market has intensified, inventories continue to decline, and the tight diesel supply trend is expected to continue until 2027. The agency also warned that if the Middle East conflict is not resolved, the global oil market may be further turbulent in the next few months.
Goldman Sachs also recently warned that diesel prices may remain high until the end of 2027 due to limited refining capacity in various countries, compounded by the effects of a recovery in demand driven by national governments and enterprises.