Fuel SignalWhen will oil prices go down?
Oil is near $110 after the Hormuz crisis. What the EIA, IEA and banks expect for 2026–27, what could speed up a fall, and when pump prices may follow.
Short answer
Slowly, and probably not before late 2026. Most forecasters expect oil to ease as Gulf exports recover rather than snap back. The US Energy Information Administration (EIA) sees Brent averaging about $105 a barrel in the last quarter of 2026, $84 in 2027 and $72 by December 2027. The Strait of Hormuz decides the pace: a deal that reopens it could cut prices much faster, while new attacks could push them higher.
- Brent crude futures closed at $109.86 a barrel on 16 October 2026, about 80% higher than at the start of the year, because of the Iran war and disruption in the Strait of Hormuz.
- Forecasts point down, but gradually: the EIA expects Brent to fall to $99 in December 2026 and $72 by December 2027, and futures for later months already trade below today’s price.
- Pump prices lag crude. The EIA expects US regular gas below $3.90 a gallon by December, but diesel, the tightest market, to stay above $5 until early 2027.
- In the UK and Europe, fixed fuel duty is a large share of the pump price, so a fall in crude moves petrol and diesel prices by a smaller percentage.
Where oil and fuel prices stand now
Brent crude, the global benchmark, closed at $109.86 a barrel on Friday 16 October 2026, its highest close since May. That is about 80% above where it ended 2025, at $60.85. US crude (WTI) closed at $101.41.
Physical cargoes cost even more than futures. The EIA’s spot price for Brent was $126.55 on 14 October, and it peaked at $138.21 on 7 April, the highest since July 2008. Spot and futures prices have drifted unusually far apart this year, so check which one a headline quotes.
At the pump, drivers are paying near-record prices, especially for diesel:
| Fuel | Late February 2026 | Mid-October 2026 |
|---|---|---|
| US regular gasoline | $2.94/gal | $4.33/gal |
| US diesel | $3.81/gal | $6.18/gal |
| UK petrol | 131.7p/litre | 175.3p/litre |
| UK diesel | 141.5p/litre | 200.0p/litre |
| EU average petrol (Euro-super 95) | €1.64/litre | €2.01/litre |
| EU average diesel | €1.59/litre | €2.14/litre |
US figures are EIA weekly averages (23 February and 12 October), UK figures are government weekly averages for the same dates, and EU figures come from the European Commission’s Weekly Oil Bulletin. AAA put US diesel at a record $6.53 a gallon on 22 September, and UK diesel passed £2 a litre for the first time ever in early October, according to the RAC.
For today’s numbers where you live, see our fuel price forecast by country, which lists average petrol and diesel prices for 15 countries and every US state.
Why are oil prices so high in 2026?
A year ago, the oil industry was bracing for a glut. Brent averaged $69 in 2025 and fell about 19% over the year as OPEC+ added supply. In February 2026, the EIA expected Brent to average just $58 this year.
Then the Iran war began on 28 February 2026 and shipping through the Strait of Hormuz collapsed. Before the war, about 20 million barrels of oil a day moved through the strait, roughly a fifth of world consumption. Between March and May, the International Energy Agency (IEA) estimates, flows averaged just 2.7 million barrels a day. IEA members agreed a record 400 million barrel release from emergency stocks on 11 March.
Prices have swung with every turn in the conflict since:
- April: a ceasefire cut Brent futures by 13% in a day, but talks failed and a US naval blockade of Iranian ports followed.
- June: deal hopes pushed Brent back down to about $74, close to its pre-war level.
- July: the truce collapsed and Brent climbed back above $100.
- September: drone attacks halted Saudi Arabia’s East-West pipeline, the main route around Hormuz, and spot Brent hit $131.
Supply has partly recovered. The IEA says oil flows through Hormuz rose to 10.9 million barrels a day in September, helped by ship-to-ship transfers in the Gulf of Oman, and the Saudi pipeline is pumping again. But a record wave of tanker attacks in early October and renewed Houthi strikes leave that recovery, in the IEA’s word, “fragile”.
The world also has little cushion left. Global oil stocks were 509 million barrels below pre-war levels by the end of September, and stocks held on land are at their lowest since at least 2016, according to the IEA’s October Oil Market Report. With thin buffers, every new attack moves prices further.
Ship counts are not barrels
Public trackers that count ships by their transponder (AIS) signals have shown the strait almost empty on some days. Many tankers now cross with transponders switched off: one analysis found that 62% of the 102 tanker transits recorded after 14 July were “dark”. Cargo trackers that estimate barrels give a fuller picture. Kpler, for example, put flows at 11.6 million barrels a day in the week to 13 October, against a normal level of about 17 million on its measure.
When will oil prices go down? What the forecasters expect
Almost every major forecaster expects oil to be cheaper in a year than it is today. They disagree on how quickly prices will fall, and all of them make it depend on how much Gulf oil gets out.
Source: US Energy Information Administration, Short-Term Energy Outlook, 6 October 2026. Monthly averages; October 2026 onwards are forecasts.
Show the data
| Month | Brent spot |
|---|---|
| Dec 2025 | $63 |
| Jan 2026 | $67 |
| Feb 2026 | $71 |
| Mar 2026 | $103 |
| Apr 2026 | $117 |
| May 2026 | $107 |
| Jun 2026 | $85 |
| Jul 2026 | $84 |
| Aug 2026 | $91 |
| Sep 2026 | $114 |
| Oct 2026 (forecast) | $111 |
| Nov 2026 (forecast) | $104 |
| Dec 2026 (forecast) | $99 |
| Jan 2027 (forecast) | $97 |
| Feb 2027 (forecast) | $95 |
| Mar 2027 (forecast) | $93 |
| Apr 2027 (forecast) | $90 |
| May 2027 (forecast) | $87 |
| Jun 2027 (forecast) | $84 |
| Jul 2027 (forecast) | $82 |
| Aug 2027 (forecast) | $80 |
| Sep 2027 (forecast) | $78 |
| Oct 2027 (forecast) | $76 |
| Nov 2027 (forecast) | $74 |
| Dec 2027 (forecast) | $72 |
US Energy Information Administration
The EIA’s Short-Term Energy Outlook, published on 6 October, expects spot Brent to average $105 in the fourth quarter of 2026, easing from $111 in October to $99 in December. It sees most of the region’s lost production returning by the end of June 2027. Brent then averages $84 in 2027 and falls to $72 by December 2027 as depleted inventories are rebuilt.
Treat that path with some caution. The EIA’s fourth-quarter figure is $14 higher than it was a month earlier, and spot Brent averaged about $127 in the first half of October, well above the $111 the agency pencilled in for the month.
International Energy Agency
The IEA expects the oil market to stay in deficit, with less supply than demand, through the end of 2026. It forecasts world supply to fall by 5.8 million barrels a day this year and to rebound by 7.7 million in 2027, far outpacing a 2 million barrel recovery in demand. That points to a surplus in 2027, the classic setting for falling prices. The agency warns, though, that markets “may experience more turmoil in the months ahead before any eventual surplus emerges”.
Banks and the futures market
| Forecaster | Published | Near term | 2027 |
|---|---|---|---|
| EIA (spot Brent) | 6 Oct | $105 in Q4 2026 | $84 average |
| Goldman Sachs | 11 Oct | $90 in December 2026 | $80 average |
| JPMorgan | 13 Oct | $105 in Q4 2026 | $100 in Q1 |
| Morgan Stanley | 13 Oct | $105 in Q4 2026 | $100 in Q1 |
| Reuters analyst poll | 30 Sep | $89 average for 2026 | Most expect a surplus |
The futures market agrees on the direction. Oil for delivery in the coming months costs much more than oil for delivery next year, a pattern called backwardation. It means traders will pay a premium for barrels now but expect supply to be easier later.
OPEC is the outlier on demand. In its October report it expects consumption to grow by 2.6 million barrels a day in 2027, partly as countries refill their stocks, which would slow any fall in prices.
Three scenarios for the next 12 months
Forecasts differ mainly in what they assume about the Gulf. These are the three paths analysts describe most often. The price ranges come from the published forecasts above; we do not attach probabilities to them.
| Scenario | What happens | What forecasters say |
|---|---|---|
| Deal and reopening | A US–Iran agreement reopens the strait, attacks stop and insurers return. | Goldman Sachs says Brent could fall into the $60s in 2027 if Gulf output ends up 1 million barrels a day above its pre-war level. |
| Slow recovery (most forecasts) | Exports keep recovering through convoys, pipelines and ship-to-ship transfers, despite attacks. | Around $90–105 by the end of 2026, then $80–84 on average in 2027 (EIA, Goldman). |
| Escalation | More attacks on tankers and pipelines, or talks break down. | Goldman says Brent could average about $125 in 2027 if Gulf output stays 5 million barrels a day below February 2026 levels. |
A reopening could move prices quickly. When April’s ceasefire was announced, Brent fell 13% in a single day. A collapse in talks moves them just as fast the other way, as July showed.
What could make oil prices fall faster
- A deal on Hormuz. Iran says its offer to reopen the strait within seven days, conditional on the US lifting its blockade and oil sanctions, “remains on the table”. Washington has not accepted it.
- Gulf production coming back. The EIA estimates that shut-in Middle East crude output fell from 10.9 million barrels a day at its May peak to 4.8 million in September. If it keeps falling, inventories can start to rebuild.
- Spare supply waiting to flow. OPEC+ finished unwinding its 2023 output cuts in September, and the United Arab Emirates left OPEC in May with plans to raise capacity. Today the limit is getting oil out of the Gulf, not production targets, so more supply could arrive quickly once routes reopen. OPEC+ next meets on 1 November.
- Emergency stocks. G7 countries agreed on 2 October to release another 100 million barrels over four months, with diesel first. The US is also offering 40 million barrels from its Strategic Petroleum Reserve for delivery in November and December.
- Weaker demand. High prices are already cutting consumption: the IEA expects world oil demand to fall by 2.6 million barrels a day in 2026. Higher interest rates, including the US Federal Reserve’s September rate rise, add to the drag.
What could keep prices high, or push them higher
- More attacks on shipping and oil infrastructure. A record ten tankers were hit in one week at the start of October, and Houthi strikes on Saudi Arabia have threatened a second chokepoint at the Bab el-Mandeb strait.
- Empty buffers. With stocks at multi-year lows and the US Strategic Petroleum Reserve at about 283 million barrels, the lowest in decades, there is little left to absorb another shock.
- A winter diesel squeeze. US distillate stocks were 12% lower than a year earlier in early October, and the EIA says East Coast stocks were 32% below their five-year average in September. Winter heating demand competes for the same barrels, and Ukraine has said it will resume strikes on Russian refineries.
- Policy surprises. The US administration has considered banning diesel exports, which analysts warn could backfire by disrupting trade.
- Weather. The Atlantic hurricane season runs to 30 November. Hurricane Isaias shut in more than half of US Gulf of Mexico oil output for several days in October.
When will gas, petrol and diesel prices go down?
Pump prices follow crude, but with a delay and only part of the way. Crude is one input alongside refining margins, transport, retail margins and taxes, and each of those has been under pressure this year.
Source: US Energy Information Administration, Short-Term Energy Outlook, 6 October 2026. Monthly averages; October 2026 onwards are forecasts.
Show the data
| Month | Diesel | Regular gasoline |
|---|---|---|
| Dec 2025 | $3.61 | $2.89 |
| Jan 2026 | $3.52 | $2.81 |
| Feb 2026 | $3.72 | $2.91 |
| Mar 2026 | $4.92 | $3.64 |
| Apr 2026 | $5.50 | $4.10 |
| May 2026 | $5.60 | $4.48 |
| Jun 2026 | $5.02 | $4.05 |
| Jul 2026 | $4.96 | $3.93 |
| Aug 2026 | $5.46 | $4.06 |
| Sep 2026 | $6.29 | $4.35 |
| Oct 2026 (forecast) | $6.27 | $4.40 |
| Nov 2026 (forecast) | $5.79 | $4.20 |
| Dec 2026 (forecast) | $5.34 | $3.86 |
| Jan 2027 (forecast) | $5.06 | $3.72 |
| Feb 2027 (forecast) | $4.91 | $3.65 |
| Mar 2027 (forecast) | $4.80 | $3.74 |
| Apr 2027 (forecast) | $4.67 | $3.78 |
| May 2027 (forecast) | $4.58 | $3.77 |
| Jun 2027 (forecast) | $4.45 | $3.72 |
| Jul 2027 (forecast) | $4.36 | $3.65 |
| Aug 2027 (forecast) | $4.28 | $3.57 |
| Sep 2027 (forecast) | $4.25 | $3.45 |
| Oct 2027 (forecast) | $4.22 | $3.37 |
| Nov 2027 (forecast) | $4.21 | $3.25 |
| Dec 2027 (forecast) | $4.11 | $3.11 |
In the US
The EIA expects regular gasoline to average $4.40 a gallon in October, $4.20 in November and $3.86 in December, then $3.56 across 2027. Diesel falls more slowly: from $6.27 in October to $5.34 in December, staying above $5 until about February 2027 and averaging $4.49 next year. Winter-grade gasoline, which is cheaper to make, helps a little. This year an emergency waiver from the Environmental Protection Agency allowed it from 1 September, two weeks earlier than usual.
In the UK
UK petrol averaged 175.3p a litre and diesel 200.0p on 12 October. Fuel duty of 52.95p a litre plus 20% VAT makes up roughly 43–47% of those prices, so a 10% fall in crude moves the pump price by much less than 10%. The Budget on 28 October could change the picture: the AA is urging the government to keep the current 5p duty cut and add another 5p. See the UK petrol price forecast for the short-term outlook.
In Europe
EU petrol averaged €2.01 a litre and diesel €2.14 on 12 October, after both set records in late September. Taxes make up roughly 38–45% of those prices, ranging from €1.79 a litre for petrol in Spain to €2.46 in the Netherlands.
Why diesel will take longer
Diesel is the tightest part of the market. Wholesale diesel hit all-time highs of about $220 a barrel in Europe and the US in September. The IEA expects the diesel market to stay tight “well into 2027”, with lost stocks unlikely to be replenished before the second half of next year. Drivers of diesel cars, and anyone buying heating oil, should expect relief later than petrol drivers.
“Rockets and feathers”
Pump prices tend to shoot up like rockets when crude rises and drift down like feathers when it falls. In the first two weeks of March, US gasoline jumped 23%, from $3.02 to $3.72 a gallon. Yet in late June, with Brent futures back near their pre-war level, US gasoline was still about 89 cents above its February price and UK diesel about 26p higher. Some of that gap reflected high spot crude prices and refining margins, not just slow retailers. The UK’s competition watchdog found the pattern clearly in diesel prices in 2023.
As a rule of thumb, every $10 fall in the price of a barrel is worth about 24 cents a gallon before tax, since a barrel holds 42 gallons. In the UK it works out at roughly 5–6p a litre including VAT, depending on the exchange rate. Expect most of a fall in crude to reach the pump over several weeks, not days.
How to time your fill-ups while prices are high
- Watch the direction of crude, not just the headline price. When crude jumps, local prices usually follow within days, so filling up before they move can save money. When crude falls, pump prices take weeks to catch up, and there is rarely a rush.
- Compare stations. Prices vary widely between nearby forecourts, and supermarkets are often cheapest. Map and price-comparison apps make the difference easy to see.
- Don’t panic-buy. Queuing to fill up after a scary headline is how local shortages start, and it rarely beats the next price change.
- Use less fuel. Correct tyre pressures, smooth driving and slightly lower motorway speeds can cut consumption noticeably, and that saving is guaranteed at any price.
- Check a short-term outlook. Our US gas price forecast and country pages estimate whether prices may rise, fall or hold over the next one to three days, with a confidence level. The oil market news page explains the events behind each move.
Frequently asked questions
Will oil prices go down in 2027?
Most forecasts say yes. The EIA expects Brent to average $84 a barrel in 2027, down from $96 in 2026, and Goldman Sachs expects $80. Both assume Gulf oil exports keep recovering. If the Strait of Hormuz stays heavily disrupted, prices could stay above $100.
When will gas prices go down in the US?
The EIA expects regular gasoline to fall from about $4.40 a gallon in October 2026 to $3.86 in December and to average $3.56 in 2027. Diesel will take longer, staying above $5 until about February 2027.
Will petrol prices go down in the UK?
UK pump prices follow crude with a lag of several weeks, so petrol and diesel are likely to ease only after oil prices fall. Fuel duty is also important: the Budget on 28 October 2026 will set out whether the current 5p-a-litre cut continues.
Why is diesel more expensive than petrol right now?
Diesel stocks are very low, wholesale diesel hit record prices in September, and winter heating demand competes for the same supply. The IEA expects diesel markets to stay tight well into 2027.
How long does it take for pump prices to fall after oil drops?
Usually several weeks. Retail prices rise quickly when crude jumps but fall slowly when it drops, a pattern known as rockets and feathers. Each $10 a barrel fall is worth about 24 cents a gallon before tax, or roughly 5–6p a litre in the UK.
Could oil prices go back to $60?
Not soon, according to most forecasts. Goldman Sachs says Brent could fall into the $60s in 2027, but only if Gulf output recovers to above its pre-war level. The EIA’s forecast reaches $72 by December 2027.
Sources
- Short-Term Energy Outlook, October 2026 · US Energy Information Administration, 6 October 2026
- STEO global oil markets: forecast detail · US Energy Information Administration, 6 October 2026
- Short-Term Energy Outlook, February 2026 · US Energy Information Administration, 10 February 2026
- Spot prices for crude oil and petroleum products · US Energy Information Administration, data to 14 October 2026
- Gasoline and Diesel Fuel Update · US Energy Information Administration, 12 October 2026
- Weekly Petroleum Status Report · US Energy Information Administration, 15 October 2026
- Oil Market Report, October 2026 · International Energy Agency, 14 October 2026
- IEA member countries to carry out largest ever oil stock release · International Energy Agency, 11 March 2026
- How global oil supplies have readjusted to the Strait of Hormuz shock · International Energy Agency, 22 June 2026
- OPEC+ meeting of seven countries · OPEC, 4 October 2026
- Global oil demand to see slower growth in 2026: OPEC report · Xinhua, 14 October 2026
- Gas prices: national averages and records · AAA, 18 October 2026
- Weekly road fuel prices · Department for Energy Security and Net Zero (GOV.UK), 13 October 2026
- Diesel tops £2 a litre for first time ever · RAC, 2 October 2026
- AA calls for further fuel duty cut · The AA, 12 October 2026
- Weekly Oil Bulletin · European Commission, 15 October 2026
- EU fuel prices in 2026: from the strikes on Iran to the September records · fuel-prices.eu, 2026
- Road fuel market study: final report · Competition and Markets Authority, 3 July 2023
- Goldman Sachs lifts December 2026 Brent price forecast to $90/bbl · Reuters via BOE Report, 11 October 2026
- JPMorgan raises Brent crude oil price forecasts for 2026 and 2027 · GuruFocus, 13 October 2026
- Morgan Stanley lifts Brent forecast to $105 · InvestingLive, 13 October 2026
- Analysts raise 2026 oil forecasts on prolonged Gulf disruption · Reuters via Global Banking & Finance, 30 September 2026
- Oil prices head for weekly gain as Hormuz attacks rattle markets · Oilprice.com, 16 October 2026
- Oil surges as Middle East supply fears push Brent near $110 · EnergyNow, 16 October 2026
- Hormuz ship attacks surge: are increased oil exports sustainable? · Al Jazeera, 6 October 2026
- From Yanbu to Sohar: tracking Saudi Arabia’s alternative oil routes · Al Jazeera, 17 September 2026
- Iran urges US to accept proposal to reopen Strait of Hormuz · Arab News (Reuters), 18 October 2026
- Dark tanker transits dominate Hormuz since 14 July · Hellenic Shipping News, 2026
- G7 plans 100 million barrel oil release to ease soaring fuel prices · Nairametrics, 2 October 2026
- US seeks to release another 40 million bbl from SPR despite low inventory levels · Oil & Gas Journal, 2026
- Diesel export ban under consideration · CNBC, 28 September 2026
- EPA expands gasoline supply to lower prices at the pump · US Environmental Protection Agency, 20 August 2026
- US Gulf producers shut in more oil and gas as Isaias nears landfall · Reuters via BOE Report, 9 October 2026
- Russia says Ukraine resumes attacks on oil refineries · Al Jazeera, 15 October 2026
- FOMC statement · Federal Reserve, 16 September 2026
- Oil slips as Brent heads for longest losing streak · Reuters via Yahoo Finance, 31 December 2025
General information, not financial advice. Oil and fuel price forecasts are uncertain and can change quickly. Prices quoted are averages from the linked sources on the dates shown; your local pump price may differ.