European gasoil supplies remained tight in October 2026 as disruption to inland waterways constrained deliveries despite refiners’ efforts to increase middle distillate production, according to Alkagesta Market Insights. Its 21 October assessment said low inventories across Northwest Europe and the Mediterranean were supporting physical differentials against front-month ICE Low Sulfur Gasoil futures, leaving the market exposed to immediate supply interruptions and colder weather.
The Rhine bottleneck was particularly acute for deliveries to Germany and Switzerland. Alkagesta reported water-level readings at Kaub of just 1–2 cm on 6 and 8 October, subsequently hovering around 7–18 cm. Restricted barge loading left inland distributors dependent on more expensive rail and pipeline transport. Buyers largely limited purchases to immediate requirements, while physical barge differentials for 50 ppm gasoil, used as heating oil in both countries, moved from a $26.75-a-tonne discount early in October to a $10.75 premium by mid-month.
Inventory buffers offered limited protection. Alkagesta put ARA middle distillate holdings at 2.255 million tonnes, 20% below the five-year average, and gasoil/diesel stocks at 1.664 million tonnes, down 21% year on year. The middle distillate shortfall had nevertheless narrowed from the 25% deficit recorded in its earlier European ULSD outlook. Planned maintenance at secondary refinery units was expected to constrain further improvements in distillate yields.
Seaborne supply was also being reshaped by shortages and expensive freight. Alkagesta said middle distillate deficits east of Suez and low European stocks were drawing US Gulf Coast gasoil cargoes towards Northwest Europe and Mediterranean ports. Clean-product volumes transported by LR2 tankers fell 28% year on year to 2.1 million barrels a day over the first nine months of 2026. Arab Gulf-to-UK/Continent LR1 freight reached $220.77 a tonne on 19 October, compared with $46.41 a year earlier.
In West Africa, the offshore Lome market received about 586,000 tonnes of gasoil during the first half of October, according to the assessment. Higher freight costs encouraged Nigerian buyers to favour domestic depot supplies over offshore imports. Looking ahead, Alkagesta expects delayed heating-oil purchases in Germany and Switzerland to concentrate spot demand as temperatures fall, while Rhine restrictions could persist without sustained rainfall. These forecasts reflect the company’s market assessment rather than assured outcomes.
Read the original announcement on Alkagesta.