Goldman Sachs Sees Diesel Refining Margins Soar to $63 a Barrel

Goldman Sachs sees diesel refining margins climbing sharply as refinery damage and export restrictions tighten an already strained market. The bank raised its 2027 estimates for refiners in the United States and European Union, pointing to low inventories and supply disruptions. The available figures describe margins, not a current diesel or crude price quote.

Goldman Sachs sees diesel margins rising in 2027

The revised forecast puts United States diesel refining margins at $63 per barrel in 2027, up from $27 in the bank’s earlier estimate. For European Union refiners, Goldman now expects an average of $49 per barrel, compared with its previous forecast of $19.

Those higher estimates reflect the widening gap between the cost of crude and the value of refined fuel. USO tracks crude oil, not diesel, and no USO price reading is supplied here, so it cannot establish a current crude move or a direct diesel price. The figures available point instead to refining margins reaching exceptional levels.

Outages and export limits leave diesel stocks exposed

Refinery outages are currently 60% above their seasonal average, according to Goldman’s commodity team. Damage to facilities in the Middle East and Russia has reduced output while global diesel inventories remain low. The bank expects the tightness to carry into next year.

Fuel exports from the Persian Gulf are running at about 40% of prewar levels, while crude exports are estimated at 70% to 80%. That gap leaves less refined product reaching buyers even as some crude continues to move. Production losses, rather than a lack of crude alone, are central to the diesel squeeze.

War damage and European capacity limits compound the squeeze

Several Middle Eastern refineries have been damaged during the United States and Israeli war with Iran. In Russia, Ukrainian drone attacks have squeezed production, prompting Moscow to prohibit diesel exports. The ban was recently extended through the end of September.

Europe faces an additional constraint: fewer refineries. Energy companies shut capacity in anticipation of demand falling under European Union climate rules, but that expected decline has not materialized. The result is less local capacity available to respond as imports tighten.

Refining margins have reached record highs around the world during the energy crisis. In the United States, the crack spread moved above $100 per barrel for the first time earlier this month. The supply picture now hinges on whether damaged plants return and export limits ease before the forecast tightness extends further into next year.

Live crude oil price and chart →