Gulf crude is flowing again, but diesel isn’t, and the West’s fuel stockpiles are nearly spent heading into winter

Gulf crude is back on the water, but the fuels the West runs on are still in short supply, and the stockpiles that covered the gap are running low as winter approaches. Middle Eastern crude shipments were back to roughly pre-war levels by late September, while diesel and gasoline exports were running at just 58% of pre-war volumes.

The West has almost used up its cushion, Vitol Group CEO Russell Hardy said at the Energy Intelligence Forum in London, Bloomberg reports. Months of disruption from the regional war have eaten through the inventories markets can readily draw on, leaving little room to absorb another supply shock, he said.

The IEA’s numbers show how fast that happened: Global observed oil inventories fell by 507 mn barrels between the start of the war and the end of August, including 95 mn barrels in August alone, according to the International Energy Agency (IEA). The agency warned that shrinking stocks and a strained global refining system are raising the risk of further tightening.

Diesel is where the squeeze is: Gulf diesel and gasoil exports averaged 390k bbl / d in August, about a quarter of pre-war levels. Disruptions at Russian refineries have added to the shortfall, leaving combined Gulf and Russian diesel exports 1.6 mn bbl / d below February.

European refiners have little room to make up the difference: They were already running near maximum capacity in late September, according to the European Commission. Commercial stocks at the Amsterdam-Rotterdam-Antwerp hub are below their five-year average, though they have stabilized in recent weeks. The Commission said European supplies remain stable, but the global shortage has kept diesel and jet fuel prices high.

So Washington is buying Russian diesel: US President Donald Trump reached an agreement with Russian President Vladimir Putin to bring more than 300k tons of Russian diesel into US and global markets immediately, followed by 500k tons in November and 1 mn tons after that, Reuters reports. The US has also eased sanctions on Russian diesel imports until 7 April 2027.

The G7 is speeding up emergency releases and putting diesel first: The group plans to put up to 100 mn barrels of crude and diesel into the market over four months, largely by accelerating the 400 mn-barrel emergency program agreed in March, of which 325 mn barrels have been released. Country allocations, the product mix, and delivery arrangements are still being worked out, according to the IEA.

Plenty of oil is still in storage, but not all of it can reach the market: IEA member governments hold roughly 1.1 bn barrels of public emergency stocks, including more than 200 mn barrels of diesel, and the agency says further releases remain possible. Aramco CEO Amin Nasser has said less than 10% of global oil inventories can be accessed in practice because of logistical and technical limits.

East Coast distillate stocks were 32% below their five-year seasonal average in September, according to the US Energy Information Administration. The agency expects them to stay 20-30% below normal through winter, when the region leans harder on imported heating oil and diesel. Imports typically cover around 15% of East Coast distillate demand from December to February, which leaves buyers exposed to the same global shortage.

What’s next: The second batch of Russian diesel, 500k tons, is due in November, and G7 governments still have to agree on who releases what and when.