Goldman Sachs energy analyst Nikhil Bhandari previously warned of a prolonged refining crisis impacting diesel and gasoline prices until 2027. The International Energy Agency now corroborates this, predicting tight diesel supplies well into the second half of next year. The IEA's October Oil Market Report indicates the gasoil market balance will remain strained until 2027, contingent on Middle Eastern supply recovery. Disruptions from the Middle East and Russia caused significant stock draws in the third quarter of 2026. Heavier-than-normal inventory declines in the second quarter left global markets vulnerable ahead of peak winter demand. Governments are implementing measures like fuel tax cuts and draining strategic reserves to mitigate the impact of record diesel prices. The IEA forecasts that even with expected refinery throughput recovery, gasoil supply will not meet demand in the fourth quarter of 2026. Replenishment of lost inventories is unlikely before the second half of 2027. The crisis stems from Ukrainian drone attacks on Russian refineries and ongoing Strait of Hormuz disruptions. This refining crisis could lead to businesses and consumers cutting fuel use, impacting various sectors and potentially fueling inflation. US diesel prices surpassed $6.50 a gallon, prompting President Trump to seek relief from Russia. The Trump administration also advocated for a G7 release of 100 million barrels of oil and fuel products. Furthermore, the administration announced the use of the Defense Production Act to expand fuel production at a Texas refinery.