Goldman Sachs forecasts that refining margins, particularly for diesel, will remain significantly elevated through 2026 due to tighter petroleum product supply. This supply crunch is driven by geopolitical tensions and disruptions in the Strait of Hormuz, which have pushed refiners' margins to two to three times their historical averages.
Market Impact
The projection of prolonged high refining margins will likely boost downstream profitability and encourage refiners to maximize throughput. However, persistent supply constraints in critical chokepoints like the Strait of Hormuz will keep global fuel markets tight, increasing volatility and transportation costs for refined products.
Why This Matters for Cyprus
This forecast signals sustained profitability for the downstream sector through 2026, while alerting energy professionals to ongoing supply chain vulnerabilities and elevated fuel costs.