Morgan Stanley Expects Refinery Work to Constrain Fuel Supplies Through Mid-2027

U.S. diesel prices reached a wholesale record in September, while Morgan Stanley’s forecast calls for postponed refinery maintenance to constrain global fuel supplies through mid-2027.

The bank’s Oct. 20 forecast projects an increase of 3.4 million barrels a day in planned refinery outages by the second quarter of 2027. Refineries had postponed maintenance while margins were strong. The resulting work is expected to constrain fuel supply even if disruptions tied to war ease.

Fuel trade has already weakened. Global seaborne gasoil and diesel net exports averaged 4.7 million barrels a day from January through September 2026, a 10% decline from the same period a year earlier. That measure covers net exports shipped by sea, rather than all fuel exports.

The September decline was especially sharp for two major exporting regions. Together, the Middle East and Russia recorded net exports of 820,000 barrels a day in September, down 1.3 million barrels a day from September 2025. The regional figure covers a single month, while the global average covers the first nine months of 2026.

In the United States, wholesale diesel reached an all-time high of about $220 a barrel in mid-September. Higher diesel costs can increase the expense of moving goods and add to inflation. Diesel supplies have also tightened in Europe.

Refinery output is expected to improve toward the end of 2026, but fourth-quarter gasoil supply is still projected to remain below demand. A surplus in early 2027 could start rebuilding inventories, though it may not replace all the stock lost during 2026. That leaves the pace of inventory recovery important as planned refinery outages rise through the second quarter of 2027.