Oil Market Weekly Report | Week 39, 2026: ARA Stocks Hit Crisis Levels as US Diesel Export Ban Threat Looms
Global oil markets this week were dominated by tightening European product stocks, diverging Asian refinery runs, and the looming threat of a US diesel export ban. Here are the five key crude oil and refined products developments traders and analysts need to know.
1. Combined China-India Refinery Runs Creep Back Toward Pre-Conflict Peaks
⚡ Combined Chinese and Indian refinery runs hit 19.4MMBD in August as China finally ramped up after a 4-month lull. With momentum building, a 20MMBD+ print looks likely in Q4, still shy of the 20.9MMBD pre-Hormuz peak. (Source: NBS China, PPAC)
2. Indian and Chinese Diesel Exports Remain Far Short of 2022 Peak Levels
⚡ Indian product exports dipped in August after July's surge, with Diesel and Gasoline falling back below 2025 levels. Indian Diesel remains 1,000KT/month short of its Q4 2022 peak while Chinese Diesel exports, despite an August rebound, remain similarly distant from 2022 highs. (Source: PPAC)
3. South Korean Naphtha Imports Plunge Below 2020 Lows as Petchem Demand Crumbles
⚡ South Korean Naphtha imports in August fell to their lowest level on record, surpassing even the 2020 lows. Cracker feedstock demand continues to collapse, with the petrochemical sector firmly leading the broader demand destruction narrative. (Source: KNOC)
4. US Diesel Export Ban Rumours Crater the Front of the HOGO Curve
⚡ Rumours of a 90-day US Diesel export ban sent the front 3 months of the HOGO curve sharply lower, wiping out Heating Oil's outperformance over Gasoil. The back of the curve remained relatively unmoved, reflecting the market's view of a temporary and contained disruption.
5. ARA Product Stocks Under Siege as US Diesel Export Ban Threat Looms
⚡ ARA Jet stocks are down 50% y/y while Gasoil stocks have fallen 24% y/y, sitting just 240KT above 2022 lows. A potential US Diesel export ban threatens to derail any restocking effort, adding further pressure to an already critically depleted European hub.
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