BAKU, Azerbaijan, October 30. An increase in
petroleum product shipments from regions outside the Middle East
will only partially offset supply disruptions from Middle Eastern
countries, and the restoration of market balance will be hampered
by logistical constraints and low fuel inventories.


This was reflected in an analytical review of BMI, a unit of
Fitch Solutions.


According to BMI’s forecast, strong refining performance is
expected to drive higher refinery utilization rates across the
U.S., Europe, and Asia.


"For instance, the 3-2-1 crack spread, a key indicator of
refining margins, rose from $17 per barrel on January 2, 2026, to
$48.4 per barrel by October 14. In late August and early September,
this figure exceeded $59 per barrel," the review noted.


"Despite some decline, margins remain above the levels seen at
the start of the year, which will continue to support the
production of middle distillates, including diesel fuel. At the
same time, factors such as refinery configuration, feedstock
quality requirements, maintenance schedules, and regional product
quality standards limit the scope for rapidly increasing diesel
output.


Refineries located along the U.S. Gulf Coast are relatively
well-positioned to boost exports, thanks to the availability of
U.S. crude oil and well-developed export infrastructure. However,
additional supplies from the U.S. will not be sufficient to fully
offset the decline in export volumes from the Middle East.







Russian exports of petroleum products could also help to some
extent in easing shortages in certain Atlantic Basin markets.
Nevertheless, the potential for increasing these supplies will be
constrained by refinery maintenance, domestic fuel demand, and
sanctions-related restrictions affecting shipping, insurance, and
payments," the BMI review said.


BMI forecasted that manufacturing of petroleum products in
Russia in 2026 will reach 4.57 million barrels per day, a figure
that has been revised downward by 20%. The review also notes that
high diesel prices will curb demand growth in price-sensitive
sectors, including the transport of non-essential goods,
construction, and certain types of industrial activity.


"At the same time, demand will remain relatively resilient in
freight transport, agriculture, mining, industrial processes, and
backup power systems.


In the medium term, the growth of diesel consumption in India,
Brazil, Indonesia, and Vietnam will be driven by the expansion of
freight transport, industrialization, and the development of
agricultural production. This will limit the potential for any
significant decline in prices," the BMI review added.


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