Europe imports diesel from Mexico for first time in seven years as supply crisis deepens

Europe’s diesel market is stretched so thin that the continent is now pulling imports from Mexico for the first time in seven years. The move underscores just how dramatically the Iran conflict and the ongoing embargo on Russian energy have reshuffled global fuel trade routes.

The numbers paint a grim picture

Europe’s seaborne middle distillate imports from the Middle East Gulf dropped to just 40,000 barrels per day in May 2026. According to Vortexa’s tracking data, that’s the lowest level in a decade of record-keeping, dating back to 2016.

Russian diesel exports have cratered to roughly 234,000 barrels per day as of early July 2026. For context, the average through 2025 was around 817,000 barrels per day. That’s a decline of more than 70%.

Before the 2022-2023 conflict triggered European sanctions, Russian diesel accounted for nearly half of Europe’s imports.

Northwest Europe’s diesel imports from external regions hit a decade low of approximately 1.64 million tonnes in April 2026. May didn’t offer much relief either.

Mexico enters the chat

Mexico’s state-owned oil company Pemex has been quietly building its export capacity. Its Olmeca refinery, also known as Dos Bocas, resumed diesel exports after roughly a decade of inactivity. From August 2025 through February 2026, Pemex averaged exports of 36,000 barrels per day, shipping primarily to the US and Caribbean markets.

It’s a route that hasn’t been commercially relevant since 2019. Shipping diesel from the Gulf of Mexico to Northwest Europe is a significantly longer haul than from the Middle East or, in the pre-sanctions era, from Russian ports on the Baltic and Black Seas.

Wall Street is paying attention

The structural vulnerability of Europe’s diesel supply hasn’t gone unnoticed by the financial sector. Morgan Stanley and Goldman Sachs have both flagged the elevated risk in European middle distillate markets.

Morgan Stanley projects that European diesel inventories could fall to around 299 million barrels by November 2026, a multi-year low in stockpiles at a time when demand typically ramps up for winter heating.

Hedge funds have responded by building bullish positions on European diesel futures. Diesel crack spreads in Northwest Europe have surged to record levels, reflecting how much buyers are willing to pay to secure supply.

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