Tightness in the global gasoil market is expected to extend into 2027 amid prolonged supply disruptions and escalating attacks on energy infrastructure in the Middle East, the International Energy Agency (IEA) said Wednesday.
In its October Oil Market Report, the IEA said global diesel exports fell by 700,000 barrels per day (700 kb/d) year on year in September, as prolonged supply disruptions led to counter-seasonal stock draws ahead of autumn refinery maintenance and peak winter demand.
Although global gasoil prices have eased from record highs of more than 200 U.S. dollars per barrel in September, benchmark prices remain nearly twice the level of crude oil prices and almost double their own pre-crisis levels.
The IEA warned that record gasoil prices were already having widespread economic consequences, raising the cost of goods and affecting real incomes, economic activity and inflation.
The IEA said the gasoil market balance is expected to remain tight well into 2027, depending on a recovery in product supplies from the Middle East. It added that without such a recovery, further demand reductions may be needed to balance the market, potentially at a high economic cost.
Global oil demand is forecast to fall by 2.5 million barrels per day (mb/d) year on year in the fourth quarter of 2026 and by an average of 2.6 mb/d over the full year. A partial recovery of 2 mb/d in 2027 is expected to leave global oil consumption 620 kb/d, or 0.6 percent below 2025 levels, it said.
Global oil supply is projected to decline by an average of 5.8 mb/d to 100.7 mb/d in 2026, before rebounding by 7.7 mb/d in 2027. However, renewed attacks in the Gulf are threatening to undermine the recovery, the IEA said.
A recovery in Middle Eastern oil supply was well underway in September, with Gulf crude oil exports approaching pre-war levels. However, escalating attacks on regional energy infrastructure and tanker traffic are threatening further gains, the IEA said, adding that Brent crude futures have risen by 13 percent since the beginning of September to around 107 dollars per barrel.
In the absence of a resolution to conflicts in the Middle East, oil markets may experience more turmoil in the months ahead before any eventual surplus emerges in 2027, the IEA said.
IEA warns global gasoil market tightness to extend into 2027
Azerbaijani President Ilham Aliyev met with Chinese Foreign Minister Wang Yi in Baku on Wednesday.
Aliyev asked Wang, also a member of the Political Bureau of the Communist Party of China Central Committee, to convey his warm greetings and best wishes to Chinese President Xi Jinping and thanked Xi for sending Wang as his special representative to attend the Seventh Summit of the Conference on Interaction and Confidence Building Measures in Asia (CICA) in Azerbaijan.
Aliyev said Azerbaijan and China enjoy a high level of political mutual trust and mutually beneficial economic cooperation, and their comprehensive strategic partnership is flourishing.
The common understandings he reached with President Xi during his visit to China last year have been effectively implemented, bringing bilateral relations to a new stage, Aliyev said.
Aliyev expressed appreciation for China's longstanding strong support for Azerbaijan in pursuing its economic and social development and safeguarding national interests.
He said Azerbaijan regards China as a leading force in the rise of the Global South, and Chinese modernization has set an example for developing countries, including Azerbaijan.
Noting that Azerbaijan was among the first countries to support and participate in the Belt and Road Initiative, Aliyev said a series of cooperation projects between the two countries has yielded fruitful results.
Azerbaijan is willing to strengthen strategic alignment with China and further expand cooperation in areas such as energy and connectivity, Aliyev said, adding that Azerbaijan welcomes more Chinese companies to invest and do business in the country.
He also called for making full use of the mutual visa exemption agreement to further promote people-to-people exchanges between the two countries.
Aliyev said Azerbaijan firmly adheres to the one-China principle, fully supports the global initiatives put forward by President Xi, and appreciates China's consistent commitment to upholding international fairness and justice and multilateralism.
Azerbaijan is willing to strengthen coordination and cooperation with China in international and regional affairs, he added.
Wang conveyed President Xi's cordial greetings to President Aliyev, saying that under the strategic guidance of the two heads of state, China and Azerbaijan have maintained mutual understanding, trust and support, with bilateral relations enjoying strong momentum of growth and showing broad prospects for development.
China congratulates Azerbaijan on the remarkable progress it has made in national development under President Aliyev's leadership, supports Azerbaijan in pursuing a development path suited to its national conditions, and stands ready to strengthen cooperation with Azerbaijan and other parties on the Middle Corridor and remains a reliable long-term strategic partner in the process of Azerbaijan's development, Wang said.
China appreciates Azerbaijan's longstanding strong support on issues concerning China's core interests and also supports Azerbaijan in safeguarding its independence, sovereignty and territorial integrity, Wang said.
China's development represents a rise in the strength of the Global South and a boost to the collective strength of developing countries, Wang said, adding that China stands ready to continue close coordination and cooperation with Azerbaijan to safeguard the common interests of Global South countries.
China supports Azerbaijan in playing an important role on multilateral platforms such as CICA and in international affairs, and in making greater contributions to regional and global peace and stability, Wang said.
During the visit, Wang also held talks with Azerbaijani Foreign Minister Jeyhun Bayramov.
Azerbaijani president meets Chinese FM
