Energy Department raises 2027 diesel price outlook by 33 cents amid Iran war
Summary
The U.S. Energy Information Administration (EIA) raised its forecast for diesel prices in 2027 due to tight global supply and low U.S. inventories caused by conflicts in the Middle East and Ukraine. President Donald Trump said oil prices might not drop until after the November midterm elections.Key Facts
- The EIA now expects U.S. retail diesel to average $4.40 per gallon in 2027, up 33 cents from the previous forecast.
- Diesel prices recently hit record highs due to Middle East conflicts and attacks on Russian refineries.
- Low U.S. diesel inventories are partly caused by supply disruptions in the Middle East, Russia, and China.
- Diesel inventories are expected to remain below normal levels through much of 2027.
- EIA also raised its 2026 diesel price forecast to $5.07 per gallon.
- President Trump said oil prices will start falling after the midterms but noted it could take time.
- The EIA expects global distillate (a type of diesel fuel) production to stay below last year's level, keeping prices high.
- If Middle East supply problems last beyond 2026, diesel prices and refinery profit margins could be even higher than forecast.
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