Oil Falls 32% in Five Weeks but Diesel Remains 77% Above Pre-War Levels

The price of North Sea crude fell from $136 a barrel on October 8 to about $93, a decline of 32% over five weeks, according to International Energy Agency (IEA) data in its latest oil market report. However, the gains of this decline have not been reflected in refined products at the same rate.

Diesel in Europe currently stands at about $180 per barrel equivalent, which is 77% higher than pre-war levels, while it has fallen only about 11% from its peak. The agency attributes this disparity to a shortage of refineries: global daily crude processing fell to 81.3 million barrels in October, and is not expected to rise to 84.7 million barrels until December. Refined product shipments from the Middle East also remain markedly below their pre-war levels.

On the other hand, global oil supply rose in October by 2.3 million barrels per day to reach 105.4 million barrels, driven by a recovery in Gulf exports. The IEA expects supply to exceed demand by about 1.7 million barrels per day in the fourth quarter of 2026, and by about 3.8 million barrels per day in 2027, when supply reaches 108.1 million barrels per day.

To ease pressure on diesel markets, the agency's member states are preparing to release about 71 million barrels from their strategic reserves by the end of February, including 15 million barrels of diesel specifically. The agency cautions that reserve releases do not compensate for higher refining capacity, and that a sustained decline in diesel prices requires refineries to restore their full production capacity and international shipping to return to its usual levels.

This reality casts a direct shadow over Turkey; pump prices there are set according to international refined product prices, the dollar/lira exchange rate, taxes and distribution costs, not according to the Brent price alone.