BAKU, Azerbaijan, October 30. An increase in petroleum product shipments from regions outside the Middle East will only partially offset supply disruptions from Middle Eastern countries, and the restoration of market balance will be hampered by logistical constraints and low fuel inventories.
This was reflected in an analytical review of BMI, a unit of Fitch Solutions.
According to BMI’s forecast, strong refining performance is expected to drive higher refinery utilization rates across the U.S., Europe, and Asia.
"For instance, the 3-2-1 crack spread, a key indicator of refining margins, rose from $17 per barrel on January 2, 2026, to $48.4 per barrel by October 14. In late August and early September, this figure exceeded $59 per barrel," the review noted.
"Despite some decline, margins remain above the levels seen at the start of the year, which will continue to support the production of middle distillates, including diesel fuel. At the same time, factors such as refinery configuration, feedstock quality requirements, maintenance schedules, and regional product quality standards limit the scope for rapidly increasing diesel output.
Refineries located along the U.S. Gulf Coast are relatively well-positioned to boost exports, thanks to the availability of U.S. crude oil and well-developed export infrastructure. However, additional supplies from the U.S. will not be sufficient to fully offset the decline in export volumes from the Middle East.
Russian exports of petroleum products could also help to some extent in easing shortages in certain Atlantic Basin markets. Nevertheless, the potential for increasing these supplies will be constrained by refinery maintenance, domestic fuel demand, and sanctions-related restrictions affecting shipping, insurance, and payments," the BMI review said.
BMI forecasted that manufacturing of petroleum products in Russia in 2026 will reach 4.57 million barrels per day, a figure that has been revised downward by 20%. The review also notes that high diesel prices will curb demand growth in price-sensitive sectors, including the transport of non-essential goods, construction, and certain types of industrial activity.
"At the same time, demand will remain relatively resilient in freight transport, agriculture, mining, industrial processes, and backup power systems.
In the medium term, the growth of diesel consumption in India, Brazil, Indonesia, and Vietnam will be driven by the expansion of freight transport, industrialization, and the development of agricultural production. This will limit the potential for any significant decline in prices," the BMI review added.
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