European gasoil supply constraints drew US Gulf Coast cargoes towards Northwest Europe and Mediterranean ports in October 2026, supporting MR1 employment as long-range tanker freight rose sharply, according to Alkagesta Market Insights. Its 21 October assessment linked the trade shifts to low European inventories and middle distillate deficits East of Suez, while restricted inland transport complicated deliveries beyond coastal terminals.
Alkagesta put Arab Gulf-to-UK/Continent LR1 freight at a September average of $156.01/mt, rising to a peak of $220.77/mt on 19 October, compared with $46.41/mt a year earlier. Arab Gulf-to-Japan LR2 freight reached $224.32/mt. These increases accompanied a 28% year-on-year decline in clean product volumes carried by LR2s, to 2.1 million b/d over the first nine months of 2026. Persian Gulf clean product exports fell to 2 million b/d from 3.7 million b/d in 2025, the assessment said.
The supply imbalance increased MR1 utilisation on US Gulf Coast-to-UK/Continent and US Gulf Coast-to-Brazil routes, Alkagesta reported. Stronger transatlantic exports also brought more vessels arriving without cargo into Northwest European ports. European refiners increased middle distillate yields, but low stock cover and barge constraints continued to underpin physical gasoil differentials against front-month ICE Low Sulphur Gasoil futures.
Rhine readings at Kaub fell to 1–2 cm on 6 and 8 October, obstructing replenishment into Germany and Switzerland. Buyers consequently limited purchases to immediate requirements. Differentials for 50 ppm heating gasoil moved from a $26.75/mt discount to front-month futures early in October to a $10.75/mt premium by mid-month, according to Alkagesta. It reported ARA gasoil/diesel stocks of 1.664 million mt, 21% below the year-earlier level.
West African flows also changed, with the offshore Lome market receiving about 586,000 mt of gasoil in the first half of October. Alkagesta reported mid-month discharges totalling 180,000 mt across four MR-sized cargoes from India and one from Saudi Arabia. UK/Continent-to-West Africa freight for 37,000 mt cargoes stood at $52.90–$55.68/mt, while higher regional transport costs encouraged Nigerian buyers to favour domestic depots over offshore imports.
Looking ahead, Alkagesta expects secondary refinery maintenance, deferred heating oil purchases and continuing Rhine restrictions to sustain supply pressure. It said sustained rainfall would be needed to restore normal barge loading, with inland distributors relying on costlier rail and pipeline logistics into the winter heating season.