Goldman Sachs Names Diesel the Biggest Supply Threat in Oil Markets as EU Stocks Fall 30%
War-driven refinery losses and an EU ban on third-country Russian crude products have stripped 2.6 million barrels a day from global diesel exports.
Goldman Sachs estimated on Thursday (2026-07-30) that global diesel exports had dropped by roughly 35%, or around 2.6 million barrels per day, compared to the same period in 2025 — the sharpest contraction since the pandemic. The bank identified diesel as the most serious supply threat currently facing oil markets, citing the lowest global refining activity for this time of year since 2020. Heating oil front-month on the New York Mercantile Exchange was trading at $4.16 per gallon as of 2026-08-11.7
Europe is bearing the worst of it. EU diesel inventories have contracted 30% since March, after the bloc moved to close access not only to Russian fuel exports but also to products refined from Russian crude in third countries. That second restriction removed the workaround Middle Eastern and Asian refiners had been running: buying Russian feedstock, processing it domestically, and shipping the output to European buyers.6
The throughput damage inside Russia is severe. Crude-processing rates averaged 3.91 million barrels a day in July, the lowest since March 2005, according to figures from EA Analytics — more than 1.4 million barrels a day below the year-ago average. The IEA, in its June estimate, put Russian refinery runs at 3.8 million barrels a day, itself 1.6 million barrels a day lower than a year earlier.5
Russia had been one of the world's largest diesel exporters, shipping between 700,000 and 800,000 barrels a day before Ukraine's attacks escalated, according to Financial Times data. Drone strikes on refinery infrastructure have since forced domestic fuel rationing alongside export cuts. Energy Aspects noted that the Middle East was also a significant refined products exporter before regional hostilities damaged capacity there. Those barrels are gone too.6
The deterioration was visible earlier in the spring. Analytics firm OilX estimated Russian refinery runs at 4.69 million barrels a day in April, the lowest in more than 16 years. Russia was by then already weighing export restrictions: oil companies were advised by officials to curb foreign product sales, Interfax reported, as run rates fell under sustained attack.4
The broader global refining picture makes European restocking difficult. Goldman Sachs estimated total global throughput slumped by as much as 6.5 million barrels per day in July 2026 versus July 2025, with lower Chinese run rates compounding losses from the Middle East and Russia.7
Asian refiners are absorbing their own feedstock shock simultaneously. Gulf crude, the preferred input for Asian processing capacity, has effectively disappeared as a freely tradeable barrel, forcing Asian plants to cut throughput by 3.5 million barrels a day, or 12%, the Economist reported. Total crude inventories tracked by satellite have fallen 13%, to 545 million barrels, Kayrros data show.2
The IEA responded with its largest ever coordinated emergency reserve release: 32 member states agreed on 11 March to sell 400 million barrels from national stores, the biggest drawdown in the body's history. But reserve releases address short-term demand spikes more effectively than they replace refinery capacity destroyed over months of sustained attacks.2
Britain's position illustrates the sourcing difficulty across Europe. The US supplies 35% of UK diesel imports, according to Energy Voice, yet American politicians have been discussing fuel export restrictions as domestic prices rise. The UK government has already relaxed its Russian diesel and jet fuel sanctions — a politically awkward reversal that signals how few alternatives remain.3
Spot cargo prices show what physical tightness looks like away from the futures screen. One commodities trader told the Economist that some diesel cargoes were being sold for $600 per barrel, double the $300 recorded just a week earlier.2
The forward risk runs through Russian crude export volumes. Kpler analyst Sumit Ritolia estimated that reduced purchases from India's state-owned buyers — which had accounted for 65% of Russian crude purchases — combined with lower volumes from China and Turkey, could cut Russian crude shipments by 1.4 million barrels a day, a 39% drop from October's rate. Less Russian crude reaching any refinery, regardless of location, means less diesel leaving it.1