The prolonged conflict in the Middle East is reshaping global oil markets beyond crude price volatility, with a fresh analysis by Wood Mackenzie warning that refinery disruptions could remove an estimated 1.4 million barrels per day (bpd) from global crude processing capacity in the fourth quarter of 2026.

The development could tighten supplies of refined petroleum products across Europe and the United States, where Nigeria and several other African countries source imported fuels, potentially worsening fuel availability across the continent as more countries restrict exports.

Although traders are increasingly circumventing some restrictions by labelling finished products as blended fuel, analysts have warned that supply constraints are likely to persist across import-dependent economies, including much of Africa.

The consultancy, speaking at its Asian Oil, Refining and Chemical Markets briefing, said the crisis had fundamentally altered crude trade routes, refining economics and long-term competitiveness across the world’s largest oil-consuming region.

The disruption has been compounded by persistent Ukrainian drone attacks on Russian refineries, which left about 3.5 million bpd of refining capacity offline in August.

The combined shocks have created one of the tightest refining environments in recent history, delaying maintenance programmes in Europe and the United States and pushing refining margins sharply higher.

Senior Vice President, Refining, Chemicals and Oil Markets Research at Wood Mackenzie, Alan Gelder, said the scale of the disruption to global crude runs was without modern precedent.

While oil prices often dominate headlines, analysts said the bigger risk lies in reduced refining capacity.

Crude oil only becomes usable fuel after it is processed into petrol, diesel, aviation fuel and petrochemical feedstocks. A reduction of 1.4 million bpd in global crude runs means fewer refined products entering international markets, even if sufficient crude remains available.

The imbalance is particularly evident in diesel markets, where Russian export constraints, declining inventories and stronger winter heating demand have kept prices elevated. Petrol prices are expected to soften seasonally, but limited supply across the Atlantic Basin is likely to prevent a sharp decline.

For countries heavily reliant on imported fuels, the development creates the prospect of sustained high import bills, even if crude prices eventually fall.

The warning carries significant implications for Africa, where many countries continue to depend on imported refined petroleum products despite being oil producers.

Several major African economies, including Kenya, Togo, Ghana and South Africa, import substantial volumes of petrol, diesel and aviation fuel. Even Nigeria, Africa’s largest crude producer, has historically relied on imported refined products because of years of underperforming domestic refineries.

Higher refining margins mean exporters can charge more for finished products, increasing fuel import costs for African governments and consumers. Shipping routes have also become longer as buyers seek alternative supplies outside the Middle East, adding freight costs that are ultimately reflected at fuel stations.

Wood Mackenzie noted that Asia’s growing dependence on long-haul crude from the United States and Latin America was likely to intensify competition for available cargoes, potentially leaving African buyers to pay higher premiums for imported products.

Unlike crude-producing countries that benefit directly from higher oil prices, fuel-importing African economies often suffer wider trade deficits, pressure on foreign exchange reserves and increased inflation whenever refined fuel prices rise.

For Nigeria, elevated global refining margins make domestic production increasingly valuable by reducing exposure to expensive imported fuel and creating opportunities to export diesel, aviation fuel, and petrol to West African and other markets facing tighter supplies.

However, Dangote Refinery has admitted that it “earns import-parity pricing on domestic sales while capturing the freight and logistics premium importers once retained.”

The position suggests that, beyond supply security, Nigerian consumers could continue to face high fuel prices influenced by global market dynamics and the premiums embedded in import-parity pricing.

Current market conditions could nevertheless improve Dangote Refinery’s export opportunities into neighbouring countries where refining capacity remains insufficient.

Beyond the immediate supply disruption, Wood Mackenzie believes the conflict is accelerating structural changes that will outlast the crisis.

Asia-Pacific oil demand is projected to fall by 1.24 million bpd during 2026, with demand not expected to recover to pre-conflict levels until late 2027. Petrochemical feedstocks such as liquefied petroleum gas (LPG) and naphtha have suffered the biggest declines, while transport fuels have proved more resilient.

India is expected to lead the regional recovery, while China’s oil demand appears to have already peaked before the conflict began.

Perhaps the most significant shift involves crude sourcing, as Asia’s crude import dependency is projected to rise to 82 per cent by 2030, requiring an additional 1.5 million bpd of imports.

At the same time, the Middle East’s share of Asian crude imports is expected to decline as refiners increasingly turn to supplies from the United States and Latin America.

“The conflict has accelerated the structural diversification of Asia’s crude supply base,” Director of Oils and Refining Research at Wood Mackenzie, Sushant Gupta, said.

The consultancy expects refining margins to ease once normal shipping resumes through the Strait of Hormuz, a vital artery for global oil trade.

With non-OPEC production expected to outpace demand growth in 2027 and 2028, Wood Mackenzie forecasts Dated Brent could eventually retreat to between $50 and $60 per barrel.

Today’s exceptional profits may prove temporary, while the industry faces longer-term pressure from slowing oil demand and increasing competition from highly integrated refineries, particularly in China.

By 2035, nearly 80 per cent of the world’s top-performing refineries are expected to be Chinese facilities with extensive petrochemical integration, giving them stronger margins even in lower-price environments.

Wood Mackenzie argues that energy efficiency and deeper chemical integration will determine which refineries remain competitive as the global oil market enters a period of slower demand growth.

For Africa, countries that continue relying on imported refined fuels remain vulnerable to geopolitical disruptions thousands of miles away, while investments in domestic refining capacity could increasingly determine both energy security and economic resilience in a more fragmented global oil market.