Goldman More Than Doubles Diesel Crack Forecasts as Middle East Refinery Strikes Drain Product Supply
War-driven refinery outages have pushed global diesel exports down an estimated 35%, forcing Goldman to sharply revise its distillate crack spread forecasts upward.
NYMEX heating oil front-month held at $5.12 a gallon as of Monday (2026-09-14), after a year-to-date surge that has outrun crude oil by a wide margin. Industry officials meeting on September 9 (2026-09-09) warned the global diesel market is set to tighten further in the months ahead.5
Goldman Sachs has moved sharply beyond initial warnings. In late August (2026-08-31), the bank more than doubled its diesel crack spread forecasts, citing rising strikes on refineries across the Middle East and Russia as the engine of the supply shortfall. Goldman had earlier described the diesel squeeze as the biggest single threat facing oil markets.3,2
The scale of the disruption is measurable. Global refining throughput in July (2026) fell by as much as 6.5 million barrels per day compared with July 2025, Goldman estimated, with lower Chinese run rates compounding the wave of outages in the conflict zones. That left global refining activity at its lowest for this time of year since the pandemic of 2020.2
Diesel has absorbed a disproportionate share. Global diesel exports fell roughly 35%, or about 2.6 million barrels per day, through July (2026), Goldman estimated. Diesel valuations surged more than 100% year-to-date through early September (2026-09-07), dramatically outpacing crude.2,4
The Hormuz data illustrate why product supply cannot recover as quickly as crude supply. Of an estimated 10 million barrels per day of outbound flows through the strait, only around 1 million bpd is refined products, with the remainder leaving as crude. Even after shipping traffic through Hormuz accelerated to its highest volume since February (2026), following a 60-day US sanctions waiver for Iran announced in late June (2026-06-26), the product shortfall has not closed at the same rate as the crude recovery.5,1
Goldman put numbers to that gap in late August (2026-08-31): Persian Gulf crude exports have likely recovered to between 70% and 80% of pre-war levels, but product shipments remain at only about 40%. ICE Brent crude front-month trades at $107.61 a barrel as of Monday (2026-09-14), reflecting crude supply concerns but not the distillate market's considerably tighter position.3
Saxo Bank's Ole Hansen made a related observation in a September 7 (2026-09-07) commodities note, arguing that sub-$100 Brent prices, where the front-month briefly fell to around $73.70 on June 26 (2026-06-26) as the Hormuz blockade partly eased, masked deeper energy stress inside the barrel. Crude has recovered sharply from that trough.6,1
Goldman set a crude scenario range of $80 to $120 for ICE Brent front-month: $80 if regional supply routes stabilize, $120 if maritime attacks intensify. The bank told clients to favor natural gas and diesel positions over direct crude exposure, suggesting distillates are expected to outperform even if crude itself rallies.4
HSBC analysts offered a more tempered longer-range view: the market could return to balance by year-end (end-2026) and shift to a surplus exceeding 3 million barrels per day in 2027, with ICE Brent potentially falling to the $70s by the first quarter of 2028. That path assumes no further escalation and some recovery of regional product throughput.6
But not all demand signals point the same direction. June Goh, senior oil market analyst at Sparta Commodities, told Reuters in late June (2026-06-26) that refineries in East Asia were already well-supplied for two months and had limited immediate appetite for additional barrels. Any recovery in Hormuz product flows would therefore meet a well-stocked regional market, at least in the near term.1
Oman is accelerating refining investment, and other Middle Eastern exporters are adding capacity. But new throughput does not come online in weeks, and the industry officials who met on September 9 (2026-09-09) did not expect any significant additions before conditions worsen further.5
With Persian Gulf product shipments still at roughly 40% of pre-war levels and diplomatic efforts to make the Iranian sanctions waiver permanent still unresolved, any further deterioration in regional refinery availability would push Goldman's doubled crack forecasts higher still.3,1