Global refined oil products market Report Interpretation

Overview

This global refined-products tracker assesses inventories, refinery supply, demand and margins. Goldman Sachs concludes that outages and export losses in Russia and the Middle East are tightening diesel markets more than a possible increase in Chinese refined-product exports can relieve them.

Core views

Goldman Sachs attributes the further rise in diesel prices and margins over the past month to continuing refinery outages in the Middle East and Russia, counter-seasonal diesel inventory draws and a rising geopolitical risk premium. US retail diesel prices reached an all-time high of $6 per gallon. Under its baseline assumption that Middle East shipping disruptions and attacks on Russian refineries continue, the firm expects diesel margins to stay elevated and forecasts US and European margins of $75/bbl and $65/bbl in Q4 2026. Its baseline assumes that unplanned Middle East outages gradually moderate by mid-2027. The supply backdrop is unusually constrained. Goldman Sachs nowcasts global refinery runs at 7.9mb/d below the prior year, led by weakness in Asia-Pacific, the Middle East and Russia. Global refinery outages are estimated to be 4.7mb/d higher year-on-year. Russia is a central driver: refinery runs remain 2.3mb/d below seasonal norms, reducing diesel, fuel-oil and naphtha exports, while domestic gasoline shortages have turned Russia into a net gasoline importer, with imports 81kb/d above a year earlier. The report also notes the extended Tuapse outage as a further constraint on naphtha exports. Western refining supply has not offset these losses. Americas outages are 1.2mb/d below seasonal norms as high margins encourage refiners to defer maintenance. US refiners have announced up to 0.7mb/d of fall-maintenance delays, around 15% of the region's typical peak-season outage level. Specific delays include Motiva Port Arthur moving a 0.3mb/d crude-unit turnaround from Q4 2026 to fall 2027, while PBF Energy delayed turnarounds at Chalmette and Toledo totaling roughly 0.4mb/d to 2027. These decisions preserve near-term refinery availability but do not resolve the larger Middle East and Russian supply losses. Inventory evidence reinforces the tightness argument. OECD commercial diesel and gasoline stocks are estimated at 2% and 5% below year-ago levels, respectively, or 10mb and 16mb below seasonal norms. US diesel inventories have fallen by 0.1mb/d, or 3%, since mid-July rather than following their usual pre-Q4 seasonal build. China also appears to be drawing stocks: gasoline and diesel inventories declined by 2.2mb and 1.7mb through August, while high-frequency visible Chinese refined-product stocks were 4% below four weeks earlier. Gasoline stocks at the ARA hub remain below the seasonal range, although Fujairah showed broad-based product inventory builds. China could provide some relief, but Goldman Sachs judges it insufficient relative to disrupted Russian and Middle Eastern exports. Nearly 1mb/d of Chinese crude-distillation capacity returned from August maintenance, Chinese refinery utilization rose 2.5 percentage points during August, and high margins could encourage refiners to use unused export quotas. China retains 141mb of clean-product export quota for 2026; full use would require exports to rise about 50% from current levels and could lift exports by 0.4mb/d for the rest of the year. Even so, the report expects these additional volumes to fall short of offsetting the larger export losses elsewhere. Demand conditions are softer in response to high retail fuel prices, particularly in China, but Goldman Sachs does not see this as enough to eliminate the supply-driven tightness. Sinopec estimates that Chinese diesel demand fell 11.5% year-on-year in the first half of 2026. The firm's US gasoline-demand nowcast is down 0.2mb/d, or 2%, year-on-year while US gasoline retail prices are 30% higher year-on-year. Europe and India demand nowcasts declined by 0.4mb/d, or 2.6%, and 0.2mb/d, or 2.8%, respectively. Global jet-fuel demand in September is estimated to be only slightly higher year-on-year and 3% below trend. The report sees continued support for gasoline as well as diesel in the near term. Low gasoline yields, declining global gasoline exports and inventories, elevated freight and octane costs, and Russian gasoline imports support gasoline pricing despite softening seasonal demand. US diesel yield has dropped to 29.6%, 0.6 percentage points below a year earlier. US octane prices increased by $0.5/bbl over the past month as lower blending-component stocks supported gasoline margins, while freight rates have risen more for products than for crude since the July Red Sea disruptions. Goldman Sachs notes that the wide 2027 forward gasoline-diesel spread incentivizes middle-distillate production over gasoline, but expects that spread to revert toward seasonal norms as the market rebuilds gasoline stocks ahead of the next summer.

Analysis framework

Goldman Sachs combines high-frequency refinery-run, outage, inventory, shipping, retail-price and demand indicators with official data to assess product balances and margins. It compares current levels with year-ago and seasonal norms, then links refinery availability, export flows and stocks to regional diesel and gasoline pricing. Several current-month measures are nowcasts calibrated to lagged IEA data and more timely market data.

Methodology notes

• Industry AnalysisSupply-demand framework

  Refined-products supply-demand balance analysis

  The report evaluates refinery runs, outages, exports, inventories and demand together to explain diesel and gasoline price and margin movements.

• Other

  High-frequency nowcasting using regression models

  The firm uses timely Kpler, EIA, national-demand, retail-sales and flight-schedule data to estimate current refinery runs, inventories and demand before lagged official data are available.

• Industry AnalysisVolume-price decomposition

  Margin and product-price tracking

  The analysis separates product prices, refinery yields, freight and blending costs to identify drivers of diesel and gasoline refining margins.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Mar27-Dec27 European diesel timespread

  Recommended geopolitical-risk hedge under continued supply disruption.

  Strengths

  The report expects persistent diesel tightness as Russian and Middle Eastern export losses outweigh Chinese supply growth.

  Comparison

  European diesel margins are forecast at $65/bbl in Q4 2026; US and European wholesale margins are described as sharply above Asian levels.

  Risks

  A gradual moderation of Middle East unplanned outages by mid-2027 is part of the baseline assumption.

• Complex US Gulf Coast refineries

  Identified as principal beneficiaries of global refined-products tightness.

  Strengths

  High diesel margins and constrained global product supply support refining economics.

  Comparison

  US and European wholesale diesel and gasoline margins have risen sharply above Asian levels.

Key data

• Global refinery runs nowcast7.9mb/d below year-agoLed by weaker runs in Asia-Pacific, the Middle East and Russia.
• Global refinery outages4.7mb/d higher year-on-yearHigh Middle East and Russian outages outweigh below-normal Western maintenance.
• Russia refinery runs2.3mb/d below seasonal normsConstrains diesel, fuel-oil and naphtha exports.
• OECD diesel and gasoline stocks2% and 5% below year-ago levelsEstimated to be 10mb and 16mb below seasonal norms, respectively.
• US retail diesel price$6/gallonReached an all-time high.
• China unused 2026 clean-product export quota141mbCould imply a 0.4mb/d increase in exports for the remainder of the year if fully utilized.
• Q4 2026 refining-margin forecast$75/bbl in the US and $65/bbl in EuropeGoldman Sachs baseline forecast under continued Middle East disruptions and Russian refinery attacks.
• China diesel demand-11.5% year-on-year in 2026H1Sinopec estimate cited by the report.

Impact & implications

Goldman Sachs expects supply disruption, depleted diesel inventories and geopolitical risk to keep diesel margins elevated despite softer demand and a likely rise in Chinese exports. It identifies complex US Gulf Coast refineries as the main beneficiaries of global refined-product tightness and reiterates a long Mar27-Dec27 European diesel timespread as a geopolitical hedge.

Risks

• Higher Chinese refined-product exports later in 2026 could provide some relief to the global product market.
• The latest two weeks of global refinery-outage estimates are typically prone to upward revisions.
• High retail fuel prices are weighing on refined-product demand, especially in China.

What to watch

• Whether Middle East shipping disruptions and attacks on Russian refineries persist.
• The pace at which Middle East unplanned refinery outages moderate toward mid-2027.
• Chinese refinery-run recovery and use of the remaining 141mb of 2026 clean-product export quota.
• US and European diesel inventory trends ahead of peak Q4 diesel demand.
• Russian refinery-run recovery, gasoline imports and exports of diesel, fuel oil and naphtha.