Why oil may stay above $80 into 2027 and what it could mean for fuel prices

Oil is likely to stay expensive for longer than many people hoped. Traders who buy oil for future delivery are now pricing in a war with Iran that drags into 2027.

What are oil traders expecting?

Brent crude is the international price benchmark for oil. Traders also buy it in advance through futures contracts, which fix a price today for delivery later.

The January 2027 Brent contract trades at $102.59 per barrel. The June 2027 contract is at $92.71. The December 2027 contract is at $84.75. In December 2025, Brent traded at less than $70.

The prices slope down. By our working, December 2027 oil is $17.84 cheaper than January 2027 oil ($102.59 minus $84.75). But even the cheapest of those prices sits well above where oil was before the war.

Why has the price not come down?

Early in the war, the mood was that it would end quickly. A brief ceasefire in June strengthened that hope. OilPrice says that hope has faded.

Reports say oil flows out of the Persian Gulf have recovered. Prices still did not fall for long. The article gives two reasons. First, there is a crisis of trust in the official figures. Second, the recovery depends on costly workarounds such as ship-to-ship transfers, where oil is moved between vessels at sea. These have tightened the supply of tankers and pushed up shipping costs. Gulf producers have also had to discount their crude to keep buyers.

Iran is also striking tankers in the Strait of Hormuz almost daily, the article says. The strait is the narrow sea route out of the Gulf.

Why is diesel the bigger worry?

Refined fuels are in a tougher spot. Many Middle East refineries were hit in Iran's retaliatory strikes, so fuel flows have not bounced back as crude flows have. Diesel prices have reached all-time highs, the article says.

The International Energy Agency (IEA) is releasing more than 20 million barrels of diesel from emergency stocks. The total diesel release could reach 50 million barrels. The article warns that stocks run out, and the world is short of refining capacity to rebuild them.

Diesel futures show the strain. The November gasoil contract trades at over $1,404 per ton. The December 2027 contract is at $1,001.

What does the IEA expect?

The IEA still expects peace eventually. Its monthly report sees global supply rising to 108.3 million barrels a day, from under 101 million this year. That is a rise of over 7 million barrels a day. The article's author reads this to mean Middle East flows have not fully recovered.

What could this mean for my money?

The article does not discuss Nigeria. This part is RainingMoney's reading. Nigerians buy petrol and diesel at prices linked to global oil costs, so a long period of dear oil could keep transport, generator and food costs high. We have no Nigerian pump price data in this source, so we cannot say by how much.

The article also says high energy costs could keep inflation up worldwide. It says central bankers and governments are getting nervous. The IMF still sees global growth of 3.4% next year. Its chief economist, Silvana Tenreyro, warned: "The global economy has been resilient, but that resilience is reaching its limits."

What do we not know?

The futures prices are a snapshot, and the article gives no date for them. Futures show what traders expect, not what will happen. A peace deal could change the picture quickly.