Goldman Sachs warns of mounting diesel supply risks amid US-Iran conflict and Russian export disruptions

Goldman Sachs is warning that diesel markets are coming under fresh strain as disruptions to Russian fuel exports combine with the impact of the US-Iran war, tightening supplies and raising the risk of higher prices for consumers and businesses.

Speaking on Bloomberg’s “Insight with Haslinda Amin”, Samantha Dart, co-head of global commodities research at Goldman Sachs, said the backdrop is becoming increasingly difficult for the world’s refining system. The ...

bank’s earlier analysis had already flagged that the biggest oil shock on record, driven by conflict in the Middle East, would probably hit refined products such as diesel and jet fuel harder than crude itself.

That view reflects a broader squeeze across fuel markets. Goldman analysts have said prices for refined products have risen more quickly than crude, while shortages of medium-heavy grades of oil are making it harder for refiners to produce diesel, jet fuel and fuel oil in sufficient volumes. The bank has also previously argued that diesel margins, while off their peaks, are likely to stay above historical averages because global processing capacity remains tight.

The latest warnings come after a series of bullish oil calls from Goldman tied to the disruption in the Strait of Hormuz. In March, the bank lifted its 2026 Brent forecast to an average of $85 a barrel from $77, and its West Texas Intermediate estimate to $79 from $72, citing what it described as the largest supply shock ever seen in the crude market. It later raised its forecasts again, saying prolonged inventory draws could push Brent to an average of $90 in the fourth quarter.

Goldman has also estimated that oil output from Persian Gulf producers is running 14.5 million barrels a day below pre-war levels, a decline of 57%, with a full recovery likely to take months even if the waterway fully reopens safely and no further strikes follow. Together, those pressures suggest that the diesel market, already constrained by limited refining capacity, may remain vulnerable even if crude prices move more erratically than fuel prices in the weeks ahead.

Source: Noah Wire Services