Production cuts by Saudi Arabia and Russia have deprived the world of distillate-rich crudes
Markets facing distillate squeeze
Crude production cuts and refinery outages mean high prices are looming for heating oil and diesel this winter, and greater shale output will do little to help
The world is looking at another autumn and winter of high distillate prices, with the potential for the largest margins on record from October 2023 to March 2024. Were a major hurricane to shut down US Gulf Coast refineries, a difficult situation could turn into a catastrophe, with retail diesel consumers in certain areas paying more than $10/gal. A combination of factors have created this situation. Production cuts by Saudi Arabia and Russia have deprived the world of distillate-rich crudes, and US shale oil output is of little use because these light crudes lack a significant distillate ‘cut’. The shutdown of two North American East Coast refineries this autumn will also remove additional
Also in this section
23 January 2026
A strategic pivot away from Russian crude in recent weeks tees up the possibility of improved US-India trade relations
23 January 2026
The signing of a deal with a TotalEnergies-led consortium to explore for gas in a block adjoining Israel’s maritime area may breathe new life into the country’s gas ambitions
22 January 2026
As Saudi Arabia pushes mining as a new pillar of its economy, Saudi Aramco is positioning itself at the intersection of hydrocarbons, minerals and industrial policy
22 January 2026
New long-term deal is latest addition to country’s rapidly evolving supply portfolio as it eyes role as regional gas hub
