World Economy

Goldman Sees Diesel Prices Staying Elevated Through 2027

Elevated diesel prices will likely persist through 2027 to manage demand pressures on constrained global refineries, Goldman Sachs forecasts. The investment bank projects diesel and jet-fuel crack spreads to average above $40 per barrel next year, more than double the historical $20 level. Goldman expects Brent crude to stabilize near $80 per barrel as Strait of Hormuz flows normalize. High product prices are necessary to prevent demand recovery from overwhelming refining capacity. Utilization could potentially reach two-decade highs if consumption rebounds. Recent crude supply announcements from the Group of Seven nations are unlikely to significantly temper diesel costs long-term. Analysts note that global inventory depletion from demand management may require up to two years to reverse, keeping refined product markets tight.