European gasoil supplies remained constrained in October 2026 as disruption to inland shipping and depleted inventories outweighed refiners’ efforts to maximise middle distillate production, according to Alkagesta Market Insights. Its 21 October outlook described volatile prices across Northwest Europe and the Mediterranean, with immediate delivery needs supporting physical premiums against front-month ICE Low Sulfur Gasoil futures.
Restrictions on the Rhine impeded deliveries to Germany and Switzerland. Alkagesta reported water readings at Kaub of just 1–2 cm on 6 and 8 October, subsequently hovering around 7–18 cm. Distributors and consumers limited purchases to immediate requirements. Physical barge differentials for 50 ppm gasoil, used as heating oil in both countries, moved from a $26.75-per-tonne discount to futures early in October to a $10.75 premium by mid-month.
Inventory cover offered little protection against further disruption. The report put ARA middle distillate stocks at 2.255 million tonnes, 20% below their five-year average, while gasoil and diesel holdings were 1.664 million tonnes, down 21% year on year. The broader middle distillate shortfall had nevertheless eased from the 25% deficit recorded in Alkagesta’s earlier European ULSD outlook.
International shipping costs added pressure. Alkagesta said clean-product volumes transported on LR2 tankers fell 28% year on year to 2.1 million barrels a day in the first nine months of 2026. Arab Gulf-to-UK/Continent LR1 freight reached $220.77 per tonne on 19 October, compared with $46.41 a year earlier. Low European stocks and middle distillate shortages east of Suez drew US Gulf Coast gasoil across the Atlantic, increasing MR1 tanker utilisation on routes to the UK/Continent.
Trade patterns also shifted in West Africa, where the offshore Lome market received approximately 586,000 tonnes of gasoil during October’s first half. Higher regional freight costs helped steer Nigerian buyers towards domestic depots rather than direct offshore imports, the report said.
Looking ahead, Alkagesta expects secondary refinery maintenance and Rhine restrictions to sustain supply pressure into the winter heating season. It warned that postponed residential heating oil purchases could produce concentrated spot demand as temperatures decline, while restricted barge loads increase reliance on costlier rail and pipeline transport. These projections reflect Alkagesta’s assessments rather than assured outcomes.
Read the original announcement on Alkagesta.