Refiners have spent recent months delaying scheduled outages to capitalize on record-high margins and meet surging demand, pushing their facilities to maximum capacity. This strategy of postponement has created a backlog of essential maintenance that can no longer be ignored. The projected drop in utilization for the spring of 2027 is two and a half times the historical norm, exceeding the combined offline capacity currently seen in the Middle East and Russia.
Morgan Stanley Predicts Fuel Supply Crunch Through 2027
Global fuel markets face a prolonged period of scarcity as refiners prepare for a wave of deferred maintenance. Morgan Stanley analysts warn that the second quarter of 2027 will see an unprecedented 3.4 million barrels per day of refining capacity taken offline, effectively stalling any significant recovery in global fuel supplies.
The International Energy Agency corroborates this outlook, noting that diesel and gasoil markets remain in a precarious state. Falling inventories and steep backwardation indicate a structural shortage that will persist through the first half of 2027. While global diesel prices have retreated from their September peak of $200 per barrel, they remain elevated at nearly double pre-crisis levels. Until maintenance cycles conclude and inventory levels stabilize, the supply-demand imbalance is expected to define the market landscape.
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