Will diesel prices go up or down in 2027?

The 2027 diesel price outlook is cautiously bearish-to-neutral based on supply-side factors. New Middle Eastern refinery capacity (Saudi Aramco's Jizan refinery at full operation, Kuwait's Al-Zour refinery ramping up) is adding significant diesel/gasoil output to the Atlantic Basin. European diesel demand is structurally declining as truck fleet electrification begins and car diesel sales fall. Against this, any OPEC+ crude supply reduction would tighten distillate supply proportionally, and cold winters or marine demand spikes remain upside risks. The central case points to diesel in the €1.55–1.75/litre range in Western Europe through 2027, with crude oil movements being the primary variable.

Why is diesel sometimes more expensive than petrol?

Diesel (gasoil) can be more expensive than petrol at the pump due to supply-demand dynamics in distillate markets. Key reasons: (1) Diesel is more energy-dense and is used in commercial transport, heating, and agriculture — demand is less elastic than petrol. (2) The same refinery barrel produces both petrol and diesel; the relative prices depend on which is in tighter supply. (3) In winter, heating oil (same product as diesel) demand spikes, tightening distillate markets and raising diesel prices. (4) Maritime fuel regulations (IMO 2020 low-sulphur requirement) shifted shipping demand toward very low-sulphur fuel oil, competing with diesel refinery yields. (5) In some markets, diesel excise is lower than petrol excise, but this can be offset by higher wholesale prices.

What is the difference between diesel and gasoil price?

Diesel and gasoil refer to the same middle distillate fuel product — the terms are used interchangeably in most contexts. 'Gasoil' is the industry/trading term used in European and global commodity markets (e.g. ICE Low Sulphur Gasoil futures, the benchmark European distillate contract). 'Diesel' is the retail and consumer term. The ICE Low Sulphur Gasoil futures price at the benchmark 0.1% sulphur spec is the primary reference price for European diesel, with retail pump prices reflecting this plus refinery margin, distribution, taxes, and retail markup.

Diesel Price Outlook 2027: Supply, Demand & What Drives Gasoil Markets

Published 1 October 2026 · Updated 15 October 2026

Diesel — or gasoil in trading terminology — is arguably the world's most strategically important refined product. It fuels global freight, agriculture, construction, and heating. Its price in 2027 will be shaped by a confluence of structural and cyclical forces: new Middle Eastern refinery capacity adding supply, European fleet electrification beginning to reduce demand, biodiesel mandate increases, and the ever-present wildcard of OPEC+ production decisions and geopolitical disruptions.

For current diesel pump prices globally, use the fuel price explorer. For the 2025 crude context, see our analysis of the 2025 oil price crash. For gasoil as a product, see our gasoil glossary entry.

The supply picture heading into 2027

Global diesel supply in 2027 will be influenced by:

New Middle Eastern refinery output: Kuwait's Al-Zour refinery (615,000 bpd, one of the world's largest) has been ramping through 2024–2026 and will be at full run rate by 2027. Saudi Aramco's Jizan refinery (400,000 bpd) is also approaching full operation. Both are configured for high distillate yields, adding significant diesel-equivalent volumes to global markets.
Nigerian Dangote refinery: The 650,000 bpd Dangote refinery will contribute diesel to the Atlantic Basin by 2027 as it ramps production. See our analysis of Nigeria's fuel market.
HVO capacity expansion: European HVO (hydrotreated vegetable oil) production is scaling rapidly under RED III mandates, substituting some fossil diesel demand and creating additional paraffinic diesel supply. See our biofuel guide.

Demand drivers: structural decline meets resilience

Diesel demand in major consuming regions is at an inflection point:

Region	Trend	Key driver
Europe	Declining ~1–2% per year	Diesel car share falling; fleet electrification beginning; efficiency improvements
North America	Broadly flat	Heavy trucking demand stable; some electric truck adoption beginning
China	Declining	Aggressive EV and electric truck rollout; LNG truck fleet growing
India	Growing ~3–4% per year	Infrastructure construction; truck fleet growth; agriculture mechanisation
SE Asia / Africa	Growing ~2–3% per year	Economic development; generator demand; transport growth
Marine / bunker	Flat to modest growth	IMO 2020 compliance shipping; LNG-powered vessels beginning to displace some diesel demand

The Middle East refinery wave

The combined ramp-up of Al-Zour and Jizan represents the most significant addition to global distillate supply since the shale oil boom added crude. Both refineries are optimised for middle distillate (diesel/jet fuel) output from heavy Middle Eastern crude. Key market impact:

Net Atlantic Basin gasoil supply increases by approximately 500,000–700,000 bpd
This is partly offset by reduced European refinery runs as margins compress
ICE Low Sulphur Gasoil forward prices for 2027 delivery have already partially priced in this supply increase
The diesel-crude crack spread (difference between diesel and crude prices) is expected to normalise from 2022–2023 highs to a $20–28/barrel range in 2026–2027

Price scenarios for European diesel in 2027

Scenario	Brent crude assumption	European diesel pump price	Key assumption
Bearish	$65–72/bbl	~€1.40–1.55/l	OPEC+ further unwind; China demand weak; ample new refinery supply
Base case	$78–88/bbl	~€1.55–1.72/l	OPEC+ maintains current quotas; moderate demand growth
Bullish	$95–110/bbl	~€1.75–1.95/l	Geopolitical supply disruption; cold winter; Indian demand surge

For live prices reflecting current market conditions, use the fuel price explorer. For the historical diesel shortage context from 2022, see our global diesel shortage analysis. For the CERAWeek 2027 broader oil market discussion, see our CERAWeek 2027 preview.

Frequently asked questions

Will diesel prices go up or down in 2027? The base case is broadly stable to modestly lower in real terms: new Middle Eastern refinery capacity (Kuwait Al-Zour, Saudi Jizan) adds distillate supply while European diesel demand structurally declines. The central case points to European diesel in the €1.55–1.72/litre range through 2027, with OPEC+ decisions and geopolitical disruptions as the primary upside risk.: The base case is broadly stable to modestly lower in real terms: new Middle Eastern refinery capacity (Kuwait Al-Zour, Saudi Jizan) adds distillate supply while European diesel demand structurally declines. The central case points to European diesel in the €1.55–1.72/litre range through 2027, with OPEC+ decisions and geopolitical disruptions as the primary upside risk.
Why is diesel sometimes more expensive than petrol? Diesel's inelastic commercial demand (freight, heating, agriculture), winter heating oil competition, and marine fuel specification effects can push diesel above petrol wholesale prices regardless of excise rates. In Europe from 2022–2023, the Russia-Ukraine crisis dramatically tightened distillate markets as Russian diesel exports were sanctioned, creating the diesel shortage that pushed diesel above petrol at the pump across most of Europe.: Diesel's inelastic commercial demand (freight, heating, agriculture), winter heating oil competition, and marine fuel specification effects can push diesel above petrol wholesale prices regardless of excise rates. In Europe from 2022–2023, the Russia-Ukraine crisis dramatically tightened distillate markets as Russian diesel exports were sanctioned, creating the diesel shortage that pushed diesel above petrol at the pump across most of Europe.
What is the difference between diesel and gasoil price? Diesel and gasoil are the same middle distillate product. "Gasoil" is the trading term (ICE Low Sulphur Gasoil futures is the European benchmark contract); "diesel" is the retail term. The ICE LS Gasoil price plus refinery margin, distribution, taxes, and retail markup gives the pump diesel price. The terms are interchangeable in practice.: Diesel and gasoil are the same middle distillate product. "Gasoil" is the trading term (ICE Low Sulphur Gasoil futures is the European benchmark contract); "diesel" is the retail term. The ICE LS Gasoil price plus refinery margin, distribution, taxes, and retail markup gives the pump diesel price. The terms are interchangeable in practice.