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Global oil prices are expected to decline in 2027, although they could remain significantly higher than pre-war levels following a sharp rise in energy costs. The International Monetary Fund (IMF) projects an average barrel price of $87.39 next year, down from an estimated $95.74 in 2026.
The 2026 forecast translates to approximately KSh12,428 per barrel, while the 2027 estimate is about KSh11,344 at the exchange rates cited. Despite the expected drop, next year’s average would remain more than $17 above Brent crude prices recorded before the conflict began on February 28, 2026.
War With Iran Pushes Oil Prices Higher
Oil prices have risen by more than 70 per cent this year as the war involving the United States, Israel and Iran disrupted global energy markets. Before the conflict, Brent crude traded at around $70 per barrel, although daily prices varied.
The latest IMF projections suggest that some of the pressure could ease next year. However, the forecast indicates that energy costs may remain elevated even if global supplies improve.
Global Supply Concerns Continue
Oil prices slipped on Tuesday, October 13, after US President Donald Trump announced that Russia had agreed to supply diesel to international markets. His administration also temporarily eased sanctions on Russian fuel, raising expectations that additional supplies could help relieve pressure on the market.
Nevertheless, security concerns continue to threaten the outlook. Reports of attacks linked to Iran-aligned Houthi forces and incidents involving tankers near the Strait of Hormuz have kept supply risks in focus.
The waterway is a major route for global oil shipments, meaning prolonged disruption could affect prices and fuel availability in importing countries. Any further escalation could therefore undermine the expected decline in oil costs.
Kenya Awaits New Pump Prices
The international outlook comes as the Energy and Petroleum Regulatory Authority (EPRA) prepares to announce Kenya’s next fuel prices for the October 15 to November 14 pricing cycle. Changes in global petroleum prices and related import costs could influence the domestic review.
Current maximum retail prices in Nairobi stand at KSh214.03 per litre for Super Petrol, KSh217.86 for Diesel and KSh191.38 for Kerosene. These prices provide the baseline against which motorists and businesses will assess the next announcement.
A decline in global crude prices does not automatically guarantee cheaper fuel at Kenyan pumps. Exchange rates, shipping expenses, taxes and other components of the local pricing formula also influence the final retail prices.
For households, transport operators and businesses, the IMF forecast offers a possible sign of relief in 2027, but uncertainty remains. The direction of the conflict and the stability of global fuel supplies will be important factors in determining whether the projected decline materialises.
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