Global Refinery Runs at Multi-Year Lows as Diesel Supply Shrinks Before Winter
S&P Global cut its H2 2026 global refining forecast by 2.4 million b/d, with July throughput running 7.5 million b/d below year-ago levels.
NYMEX heating oil front-month held at $4.20 per gallon on Thursday (2026-08-27). ICE Brent front-month slipped 0.29% to $87.20 per barrel. Product prices holding while crude retreats points to a refining system that is not producing enough to rebuild inventories. S&P Global Energy said in analysis published August 13 (2026-08-13) that global refinery runs were 7.5 million barrels per day lower in July than a year earlier — a shortfall without recent precedent.4
The firm has revised its own outlook sharply downward. S&P Global now expects global runs to average 80.1 million barrels per day in H2 2026. That is 2.4 million barrels per day below its previous refined products forecast. Daniel Evans, S&P Global's Global Head of Fuels and Refining Research, described the refining system as having "little spare room left to respond."4
Three major producing regions are driving the shortfall simultaneously. Middle Eastern crude runs are set to average roughly 8 million barrels per day in 2026, S&P Global said. That is down about 1.6 million barrels per day against 2025 levels, with a large share of the lost capacity linked to Strait of Hormuz disruption.4
Russia has compounded the squeeze. Moscow's diesel export ban removed approximately 10 percent of waterborne diesel supply from the market. Russian diesel exports had already run roughly 500,000 barrels per day below year-prior levels before the formal ban took effect, S&P Global reported.4
But China, often the swing factor in global products markets, has not covered either gap. Chinese crude throughput sat almost 2.9 million barrels per day below year-prior levels in July, S&P Global said, with Beijing's refined product export controls still in place. Any expectation that those controls would ease after the renewed Strait of Hormuz disruption has since faded.4
Europe's refining base is structurally thinner than a decade ago. Thirty EU refineries closed between 2009 and 2024, and another 400,000 barrels per day of capacity was set for closure in 2025 as tightening emissions rules pushed up operating costs for remaining plants, Bloomberg reported. The continent has been drawing more aggressively on Atlantic-basin supply as a result.3
US refiners have been picking up the slack. American diesel exports ran at a daily rate of 1.5 million barrels per day for five consecutive weeks before the first week of August (2026-08-01 to 2026-08-07), when they hit a record 1.9 million barrels per day, Bloomberg reported. That sustained export pace signals how hard European and Latin American buyers are leaning on US refining capacity with few alternatives available.3
Shell, Exxon and Chevron have each said publicly that pump prices will stay elevated regardless of where crude settles, citing structural tightness in product markets rather than the crude benchmark.2
Observable global oil stocks have fallen 246 million barrels since the Persian Gulf conflict began, OGJ reported. March (2026-03) alone saw a 129-million-barrel draw, followed by another 117 million barrels in April (2026-04). Combined, that pace ran at roughly 3.9 million barrels per day. Barrels stranded in Gulf storage facilities are excluded from that tally, meaning the available-supply picture is tighter still.1
Winter heating demand has not yet peaked. With Russian export restrictions holding, Chinese throughput suppressed, and Middle Eastern processing capacity running around 1.6 million barrels per day below 2025 levels, how quickly European buyers can secure winter diesel cargoes before the autumn demand pickup accelerates is the pressure point the market is watching now.