Oil Markets to Face Supply Deficit in Q3 as Refinery Disruptions Cut Output

SEATTLE (Oil Monster): Global fuel oil markets are heading toward a tighter third quarter in 2026 as refinery outages, war-related damage and shipping restrictions reduce supplies.

Energy Aspects estimates that the global fuel oil market could face a 218,000 barrels-per-day (bpd) deficit in Q3 this year. This marks the first quarterly shortfall since Q3 2025, when the markets had registered a deficit of around 6,000 bpd.

Asia is likely to face the strongest supply pressure because of its dependence on fuel oil from the Gulf region. Singapore, the leading global bunker fuel center, imports more than half of the roughly 1 million barrels per day it consumes, according to Kpler data.

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Supply losses are already visible in Russia and the Middle East. Ukrainian drone attacks have affected Russian refinery operations, pushing the country’s fuel oil exports down to 591,000 bpd in August. It must be noted that the exports are substantially down from the 2025 average of more than 860,000 bpd.

Middle Eastern exports averaged around 447,000 bpd between March and August, almost 45% down year-on-year. Also, Kuwait’s Al-Zour refinery has shipped just one 26,000-bpd cargo since March this year, on account of additional disruptions.

Analysts warn that prolonged supply constraints could raise bunker fuel expenses for shipping companies and increase operating costs for power producers. Higher marine fuel costs could also lead to increased global freight rates.