Goldman Sachs raised its 2027 global diesel refining margin forecasts sharply, projecting US margins at $63 per barrel and European margins at $49 per barrel, up from prior estimates of $27 and $19 respectively, according to a research note released August 31.
The revision follows tightening diesel supplies extending into 2027, driven by refinery outages in the Middle East and Russia. Diesel refining margins measure the profit refiners capture by converting crude oil into finished fuel. The new forecasts imply US margins will more than double from the prior view, while European margins will increase by more than 150 percent.
Diesel markets have faced acute supply constraints this year as major refining hubs reduced output. Middle Eastern refineries underwent scheduled maintenance and unplanned strikes, while Russian refinery capacity remained offline due to military action and sanctions. These outages have persisted longer than typical seasonal disruptions, tightening the spread between crude input costs and finished product prices that refiners can command.
Goldman's revision assumes these supply pressures will not fully resolve within the next 12 months. The bank's prior forecasts of $27 and $19 per barrel assumed normalized supply. The new view of $49 to $63 per barrel assumes Middle East and Russian supply losses persist through 2027.
Diesel margins remain high globally. US diesel crack spreads, which measure the margin between crude and diesel, have traded above $30 per barrel for extended periods in 2026. European margins have similarly held above $20 per barrel as European refineries operate near full utilization and face limited spare capacity to respond to supply shocks.
The refining sector's margin environment directly affects energy majors and independent refiners. Companies including Valero Energy, Marathon Petroleum, and TotalEnergies operate US and European refineries and benefit from wider margins on diesel production. Margin forecasts influence capital allocation decisions for refinery maintenance, debottlenecking projects, and crude purchasing strategies.
Goldman's forecast implies US diesel margins will trade at roughly 2.3 times its prior estimate. European margins moving from $19 to $49 per barrel represent a 158 percent increase, driven by Goldman's view that European refineries have less spare capacity available to absorb additional crude volumes if demand spikes.
The forecast assumes no new refinery capacity comes online and no rapid resolution of Middle Eastern or Russian outages. If either condition changes materially before mid-2027, margin compression could occur faster than Goldman projects. The number to watch is whether refinery utilization rates in Europe fall below 85 percent, which would indicate capacity headroom developing and potential margin relief.
