Canada’s trucking industry is facing another potentially prolonged period of fuel-cost uncertainty as global diesel supplies remain under severe pressure. On October 14, 2026, the International Energy Agency warned that shortages of diesel and related fuels could persist well into 2027, even as global refinery production begins to recover. Disruptions linked to conflicts in the Middle East and Russia have reduced fuel exports, depleted inventories, and pushed diesel prices to extraordinary levels. For Canadian trucking companies already dealing with high operating expenses, the warning raises concerns about freight rates, profitability, and the cost of transporting everyday necessities. Although the IEA has not predicted a nationwide diesel shortage in Canada, its latest assessment suggests that the global supply problems affecting transportation, agriculture, and industry may take much longer to resolve than previously hoped.
The IEA Warns Diesel Markets May Remain Tight Well Into 2027
The International Energy Agency’s October Oil Market Report paints a troubling picture of global diesel availability. According to the agency, disruptions to Middle Eastern and Russian fuel exports have forced unusually large inventory withdrawals throughout 2026, leaving markets vulnerable ahead of the northern winter. Global diesel and gasoil supplies fell approximately 1.7 million barrels per day below year-earlier levels during the third quarter. Although refinery operations are expected to improve toward the end of 2026, that recovery will not immediately replace the diesel inventories already consumed.
The IEA expects higher refinery output to push the global diesel market into a quarterly surplus during the first three months of 2027. However, rebuilding depleted inventories beyond normal seasonal changes may not begin until the second half of the year. That distinction is important for Canadian transportation businesses. A market can produce enough fuel to meet current consumption while still lacking the reserve supplies needed to protect against additional disruptions. The warning therefore does not mean every Canadian fuel station will experience shortages. Instead, it signals that limited global inventories and continuing supply risks could keep diesel prices elevated and unpredictable for months.
Middle East Disruptions Have Removed a Major Source of Diesel Supply
A significant portion of the global diesel shortage can be traced to damaged energy infrastructure and disrupted shipping routes in the Middle East. The IEA reported that regional exports of refined petroleum products averaged approximately 1.9 million barrels per day in September 2026, compared with 4.7 million barrels per day before the conflict. Although crude oil shipments have recovered more quickly, the region’s ability to export finished fuels remains severely restricted. Combined with reduced Russian and Asian supplies, these disruptions lowered global diesel and gasoil availability by approximately 1.5 million barrels per day in the second quarter and 1.7 million barrels per day in the third quarter compared with 2025.
The distinction between crude oil and refined fuel is especially important. Even when producers can extract and export additional crude, refineries must still have the equipment, personnel, and transportation access needed to turn it into usable diesel. Damage to processing facilities can take much longer to repair than interruptions to crude shipments. The IEA also reported that Middle Eastern crude exports recovered sharply in September, but renewed attacks on energy infrastructure and tanker traffic threatened those gains. For Canadian trucking businesses, these international disruptions create price risks even without direct dependence on Middle Eastern diesel imports.
Russia’s Damaged Refineries Are Making the Global Shortage Worse
Russia’s declining refining capacity is creating another major obstacle to restoring global diesel supplies. According to an IEA assessment published September 17, Russia operates 32 major refineries with approximately 6.5 million barrels per day of installed capacity. However, intensifying Ukrainian drone attacks have damaged important refining facilities and equipment. Russian refinery throughput fell to approximately 3.8 million barrels per day in June 2026, its lowest level in more than 20 years and roughly 30% below the corresponding period in 2025. The IEA estimated that Russian diesel production had also declined by nearly 30%.
The physical damage creates problems that cannot necessarily be resolved by changing export policies. The IEA noted that complex refining units, including equipment used to produce diesel and jet fuel, can require six to eight months to repair after serious damage. Russia has introduced restrictions on some fuel exports to protect domestic availability, further reducing international supply. Although restrictions were recently eased, the IEA’s October assessment warned that limited operational refining capacity would continue to constrain Russian diesel exports. In September, combined diesel export losses from Russia and the Middle East reached approximately 1.3 million barrels per day. Until damaged refining infrastructure recovers, those missing supplies will remain difficult for other producers to replace.
Canadian Diesel Prices Are Already Reflecting the Global Pressure
Canadian trucking companies are not waiting until 2027 to experience the financial consequences. Diesel prices have risen sharply during 2026, mirroring the international shortage. According to data published by GlobalPetrolPrices using Natural Resources Canada as its source, Canada’s average retail diesel price was approximately C$2.61 per litre on October 12, compared with C$1.50 a year earlier. That represents an increase of roughly 74%. International wholesale prices have experienced equally dramatic movements, with diesel exceeding US$200 per barrel in Singapore and reaching approximately US$220 in Europe and the United States during September.
For a trucking company, small movements in the price per litre quickly accumulate. At C$2.61 per litre, a 500-litre purchase costs approximately C$1,305 before any fleet-specific discounts or adjustments. An increase of just 10 cents per litre adds another C$50 to that purchase. Across several trucks making repeated trips, the additional expense can become substantial. Prices also differ considerably between Canadian regions. Petro-Canada’s October 14 wholesale terminal postings listed ultra-low-sulphur diesel at approximately C$2.16 per litre in Toronto and C$2.47 in Vancouver, before taxes and retail markups. These are terminal prices rather than pump prices, but they illustrate regional cost differences that trucking companies must consider when planning routes and fuel purchases.
Small Trucking Companies Face Growing Pressure on Operating Margins
Higher diesel prices create particular difficulties for small trucking businesses and independent owner-operators. Fuel must generally be purchased before a shipment is completed, while payment for hauling freight may arrive later. That timing can become a serious cash-flow problem when wholesale and retail prices change rapidly. Statistics Canada’s Annual For-hire Trucking Survey found that vehicle fuel represented 15.1% of total operating expenses in 2019, illustrating its importance to the industry’s cost structure even before the latest market disruption. The proportion varies considerably between businesses and is not a measurement of current 2026 fuel expenses.
More recent figures demonstrate how concerned transportation businesses have become about operating costs. Statistics Canada’s second-quarter 2026 business conditions data showed that 33.7% of transportation and warehousing businesses expected input costs to create obstacles over the next three months. Energy was the most frequently identified input-cost concern, cited at 65.8%, ahead of labour at 43.1%. Large trucking companies may have greater opportunities to negotiate fuel purchasing arrangements or distribute expenses across extensive fleets. Smaller operators generally have fewer resources to absorb unexpected costs. When freight demand is weak or customers resist higher rates, rising diesel expenses can quickly reduce the profitability of individual trips.
Canada Produces Plenty of Oil but Is Not Insulated From Diesel Shortages
Canada’s position as a major petroleum-producing country offers some protection from international supply disruptions, but it does not make domestic fuel prices independent of global markets. The Canadian Energy Regulator reports that the country had 17 refineries with approximately 1.93 million barrels per day of combined capacity as of 2024. Statistics Canada recorded 117.1 million cubic metres of finished petroleum production in 2025, an increase of 1.4% over the previous record. Distillate fuel oil, which includes diesel-related products, accounted for 36.1% of that production. These figures demonstrate the considerable scale of Canada’s refining industry.
Nevertheless, the country continues to trade large volumes of refined petroleum products with international suppliers. According to the Canadian Energy Regulator, imports totalled approximately 485,000 barrels per day in 2025, with nearly 80% originating in the United States. That category includes gasoline, diesel, jet fuel, condensate, and other petroleum products; it should not be mistaken for diesel imports alone. Regional dependence also varies significantly, with Quebec importing approximately 103,000 barrels per day of refined petroleum products in 2025, compared with 36,000 in Ontario and 34,000 in British Columbia. These trade relationships mean Canadian fuel markets remain exposed to international pricing, refinery operations, and transportation costs. Domestic production can strengthen supply security, but it cannot completely prevent higher prices when global diesel markets tighten.
Rising Freight Charges Could Eventually Reach Canadian Consumers
Diesel’s economic importance extends well beyond trucking companies because transportation is part of the cost of nearly every physical product sold in Canada. Food, clothing, household supplies, construction materials, and industrial equipment regularly move through distribution centres before reaching their destinations. When fuel becomes more expensive, transportation companies must decide whether to absorb the additional expense, reduce operating costs, or increase the amounts charged to customers. Statistics Canada reported that prices for long-distance general freight trucking rose 4.5% between February and March 2026, while overall truck transportation service prices were 4.4% higher than a year earlier.
Many shipping companies use fuel surcharges to separate fluctuating diesel costs from their regular transportation rates. FedEx Freight Canada, for example, explains that its domestic fuel surcharges are adjusted weekly using Natural Resources Canada’s national wholesale diesel price data. GLS Canada also publishes weekly adjustments based on diesel-price information supplied through the Freight Carriers Association of Canada. These mechanisms help carriers recover fuel expenses, but they can make transportation bills more unpredictable for businesses. Some retailers may absorb higher shipping costs temporarily, while others may adjust prices for customers. The effect is not automatic or identical across industries. However, Statistics Canada’s second-quarter business conditions data found that 23.2% of transportation and warehousing businesses expected to increase their service prices, highlighting the potential for fuel-related inflation to spread through the supply chain.
Winter Demand and Refinery Maintenance Could Make Supplies Even Tighter
The timing of the current diesel shortage is especially concerning because northern hemisphere markets are entering a period of greater seasonal fuel demand. Heating oil, gasoil, and diesel belong to closely related categories of refined petroleum products, creating competition for available refinery output. The IEA reported that commercial gasoil inventories across OECD countries fell to approximately 565 million barrels in July, about 5% below pre-conflict levels. That was the lowest inventory level recorded since November 2023. Instead of building reserves during the warmer months, markets have been drawing down supplies ahead of winter.
Refinery maintenance could create additional challenges. Facilities commonly schedule maintenance during periods of lower seasonal demand, temporarily reducing production capacity. The IEA expects global refinery throughput to reach approximately 81.3 million barrels per day in October before recovering to 84.6 million barrels per day by year-end. For Canadian trucking companies operating through winter, expensive diesel can compound the normal difficulties of cold-weather transportation, including additional heating requirements, poor road conditions, and potential delays. The forecast does not establish that Canadian fuel stations will run out of diesel. However, limited international inventories and winter demand could make markets more sensitive to unexpected disruptions, leaving trucking operators exposed to further price volatility.
Emergency Oil Reserves Are Providing Relief but Cannot Solve the Entire Problem
Governments are increasingly relying on emergency petroleum reserves to contain the economic damage. In March 2026, IEA member countries coordinated a release of approximately 400 million barrels of emergency oil stocks. By the end of September, around 331 million barrels had been released under that arrangement. In early October, Group of Seven leaders agreed to accelerate the delivery of approximately 100 million barrels, prioritizing diesel supplies. Importantly, the accelerated releases were part of the previously announced emergency response rather than an entirely new 100-million-barrel addition to global supply.
On October 11, IEA executive director Fatih Birol urged member governments to speed up outstanding deliveries and consider whether additional diesel releases were necessary. The agency’s governing board is scheduled to discuss the situation on October 15. Emergency stocks can provide temporary relief when refineries or shipping routes are disrupted, but they cannot permanently replace lost production. Releasing inventories today also reduces the amount available to respond to future emergencies. The IEA reported that total observed global oil inventories were approximately 509 million barrels below their pre-war levels at the end of September. For Canadian truckers, government intervention may help stabilize fuel markets in the near term. However, a lasting improvement will depend on recovering refining capacity, restoring international shipments, and rebuilding commercial reserves.
Canadian Truckers May Need to Prepare for Another Year of Fuel-Cost Uncertainty
The outlook for 2027 contains both encouraging developments and significant uncertainties. The IEA forecasts that global oil supply will increase approximately 7.7 million barrels per day in 2027 after declining by an estimated 5.8 million barrels per day in 2026. That recovery could eventually help bring the broader oil market back into balance. Diesel, however, presents a more complicated challenge. Additional crude production does not automatically translate into more refined diesel, particularly when processing facilities remain damaged or distribution routes are disrupted. The IEA expects the global diesel market to remain tight well into 2027, with recovery dependent on improving supplies from the Middle East.
For Canadian trucking companies, managing the uncertainty will require attention to both operating expenses and the way transportation contracts account for fuel costs. Regularly reviewing fuel-surcharge arrangements, improving route efficiency, reducing unnecessary idling, and monitoring vehicle maintenance can help manage consumption. Natural Resources Canada identifies aerodynamic improvements, low-rolling-resistance tires, and idle-reduction equipment as effective options for reducing fuel use. Its Green Freight Program had supported more than 50,000 fleet equipment retrofits by December 2025. Such measures cannot eliminate international price pressures, but they can reduce exposure to rising fuel expenses. Ultimately, the IEA’s warning is less about an inevitable nationwide supply emergency than the prospect of sustained financial pressure. For Canadian truckers, the critical question is whether freight revenues can keep pace with diesel costs until global supplies recover.
