Refineries around the world are squeezing out every last drop of diesel while drowning in gasoline—a trend, Reuters reports, that could become the new normal for the next few years.
The imbalance is a confluence of major shifts in the oil market—surging production of light U.S. shale oil, plummeting exports of heavier Venezuelan and Iranian crude, weakening gasoline demand and rising diesel consumption.
Also, a major change in fuel regulations will go into effect in 2020, forcing the International Maritime Organization to require ships to use cleaner fuel. The change will likely to prolong the imbalance between diesel and gasoline, oil executives and analysts say.
Refineries that distill crude oil into fuel have always had to adapt their output to shifting demand patterns such as high consumption of gasoline in summer and increased demand for heating oil in winter.
But the market for refined products appears out of kilter in a way rarely seen before.
