EIA raises 2027 U.S. diesel price forecast amid tight supply

EIA raises 2027 U.S. diesel price forecast amid tight supply

Thu, September 10, 2026 at 4:14 PM GMT+3 2 min read

The U.S. Energy Information Administration raised its 2027 retail diesel price forecast by 8.2% on Wednesday, citing falling domestic inventories driven by tight global distillate supplies.

In its September Short-Term Energy Outlook, EIA projected retail diesel will reach an average of $4.40 a gallon in 2027, a 33-cent increase from its prior forecast of $4.07. EIA also raised its 2026 retail diesel price forecast by 4.4%, to $5.07 a gallon from $4.85.

EIA said U.S. distillate fuel oil inventories — diesel is a major distillate product — are expected to fall below 100 million barrels in September, a level not seen since 2003, and remain below the five-year (2021–2025) low through much of 2027. The agency said supply losses from the Middle East, Russia, and China, combined with high U.S. net exports of distillate, are driving inventories lower.

The agency stated: "Tightness in the global distillate market has raised domestic prices and incentivized U.S. exporters to increase distillate exports." EIA also projected that global distillate output has yet to recover to prior-year levels, a shortfall it said is contributing to tight U.S. supplies and elevated prices.

EIA said the inventory crunch could be especially severe this fall and winter. Seasonal refinery turnarounds reduce distillate output each autumn at the same time that farms and cold-weather households are ramping up consumption, and the agency warned that the resulting inventory squeeze could lift heating oil costs across the Northeast.

The agency's broader September outlook reflects ongoing disruptions to Middle East oil flows. EIA estimates crude oil production shut-ins in the region averaged 6.7 million barrels per day in August, up from 5.0 million barrels per day in July. It expects most Middle East production to return to near pre-conflict averages by the second quarter of 2027, though some producers may remain below pre-conflict output through the end of the forecast period.

Global oil inventories have fallen by roughly 400 million barrels so far this year, the agency said. EIA forecasts Brent crude to average around $90 a barrel in the second half of 2026 before declining to an average of $74 a barrel in 2027 as production recovers and inventories rebuild.

The war in the Middle East has driven the worst oil supply crisis on record, with the conflict stripping more than 14 million barrels a day from global crude flows at its peak and leaving refinery activity lagging the partial recovery in crude exports.

EIA releases a new Short-Term Energy Outlook each month, meaning the figures above could shift as the energy landscape evolves.