Europe is staring down its worst diesel supply crunch in years, and Morgan Stanley thinks it’s about to get worse. The bank’s latest research flags a convergence of depleted stockpiles, geopolitical disruptions, and surging refining margins that could push European diesel inventories to multi-year lows by the end of 2026.
The numbers behind the crunch
Northwest European distillate inventories, concentrated in the Amsterdam-Rotterdam-Antwerp hub, have fallen to their lowest levels since 2020. Diesel refining margins have surged approximately 170% in recent periods, making it dramatically more profitable for refiners to turn crude oil into diesel. Refiners are ramping output and even postponing scheduled maintenance to capitalize on those margins.
That maintenance deferral creates its own risk. Refineries that skip scheduled downtime tend to face unplanned outages later, which could make the supply picture even uglier when those delays catch up.
Morgan Stanley analyst Martijn Rats and his team are projecting that European diesel inventories are on track to hit multi-year lows by the end of 2026.
