Diesel prices could remain elevated through 2027 as a tightening refining market faces a potential recovery in fuel demand, according to Goldman Sachs, as mentioned on CNBC.

The bank believes refined-product prices will need to stay high enough to curb consumption while allowing refiners to cope with limited capacity and rebuild depleted inventories.

Goldman expects global diesel and jet-fuel crack spreads — the premium refined fuels command over crude oil — to average more than $40 per barrel in 2027. That would be more than double their typical level of roughly $20.

The expectation puts VanEck Oil Refiners ETF (CRAK Quick QuoteCRAK - Free Report) in focus. The forecast comes even as Goldman expects Brent crude prices to stabilize near $80 per barrel as crude flows through the Strait of Hormuz gradually recover.

Demand Could Put More Pressure on Refineries

A rebound in fuel consumption could intensify the strain on the global refining system. Goldman estimates that refiners would need to operate at the highest utilization rate in roughly two decades if demand recovers meaningfully next year.

CLSA’s Baden Moore said that the recent demand weakness may not be permanent as buyers have relied on inventory drawdowns, reduced consumption and refinery optimization. Rebuilding inventories could take up to two years, per the same CNBC article.

Refining Capacity Faces Structural Constraints

The supply outlook remains challenging. Goldman expects global refining capacity growth to stay negative in 2026, with capacity outside China declining by around 300,000 barrels per day.

Refined-product inventories could end the year at their lowest days-of-supply level since at least 2015. A recovery in Gulf crude exports may offer limited relief. Diesel, gasoline and jet fuel shipments remain constrained.

ETFs in Focus

The CRAK is the purest ETF play on the Goldman thesis. CRAK offers direct exposure to refiners. The fund has rallied 2.4% over the past five days (as of Oct. 6, 2026) and charges 61 bps in fees.

Note that the CRAK ETF has inched up about 0.6% over the past month while the broader market energy fund — State Street Energy Select Sector SPDR ETF (XLE Quick QuoteXLE - Free Report) — has dropped about 2% in the same time period (as of Oct. 5, 2026).

Fitch Ratings has kept its oil price forecast for 2026 unchanged at $87 per barrel and raised its 2027 forecast by $5 to $70 per barrel, meaning crude prices are going to fall next year.

Note that crude oil, currently approaching $87 a barrel, is the lowest since early September (per Trading Economics), amid signs that Middle Eastern crude exports are recovering.

Adding to the bearish pressure, G7 countries recently planned to release 100 million barrels of diesel and crude from emergency reserves. Saudi Arabia lowered the price of its flagship crude grade for Asian buyers as supply flows improved. Meanwhile, OPEC+ agreed to keep its oil production targets unchanged for November.

All these factors make CRAK a better bet over the likes of XLE or SPDR S&P Oil & Gas Exploration & Production ETF (XOP Quick QuoteXOP - Free Report) .

Why Pipelines Could Benefit

Energy pipeline and midstream stocks could be relatively attractive in this scenario. Most pipeline operators earn fee-based revenues for transporting and storing hydrocarbons, so they are generally less exposed to the actual price of crude or diesel.

But since tight refined-product inventories, constrained refining capacity and eventual inventory rebuilding are likely to be key themes in the energy market, the need to move crude and refined products through pipelines and storage systems may increase. ETFs like Alerian MLP ETF (AMLP Quick QuoteAMLP - Free Report) could gain from higher pipeline utilization, storage demand and attractive cash distributions. AMLP yields 7.68% annually and charges 101 bps in fees.