Morgan Stanley says even if current war-related supply disruptions ease, global
refined-product markets could remain tight through mid-2027 as unusually large
refinery maintenance is constraining supply. Analysts led by Martin Latz expect
planned refinery outages through Q2 next year to remove about 3.4 mln b/d of
capacity — roughly 2.5 times normal and larger than current reductions from
Middle East and Russian refiners. Eight months of Middle East conflict and
recent reciprocal attacks on energy infrastructure between Russia and Ukraine
have exacerbated the shortfall. Diesel exports have dropped sharply, pushing
diesel prices above crude; diesel is critical for transport, heating and
industry. Morgan Stanley says many refineries delayed maintenance to chase
margins but cannot defer it indefinitely, and run rates are unlikely to rebound
materially by Q2 next year.
