The International Monetary Fund (IMF) forecasts that average global oil prices will decline in 2027 following a sharp increase in energy costs triggered by the U.S.-Israel war with Iran.
The lender projects the average price of a barrel of oil to reach US$95.74 (approximately Ksh12,428.34) in 2026 before falling to US$87.39 (about Ksh11,344.40) in 2027 at current exchange rates.
Despite the anticipated decline, the projected 2027 price would remain more than US$17 (Ksh2,206.83) above the average price of Brent crude oil before the conflict began on February 28, 2026.
Global oil prices have risen by more than 70 per cent this year as the war disrupted energy markets and heightened concerns over supplies.
Before the conflict, Brent crude traded at approximately US$70 (Ksh9,086.94) per barrel, although prices fluctuated between US$66 and US$72 depending on market conditions.
Global oil prices declined on Tuesday, October 13, with Brent crude falling to approximately US$105 per barrel.
The drop followed US President Donald Trump's announcement that Russia had agreed to supply diesel to international markets. Trump also temporarily eased US sanctions on Russian fuel, with experts suggesting that additional supplies could help ease shortages and reduce pressure on global fuel markets.
However, uncertainty persists following reports that Iran-aligned Houthis struck Riyadh's international airport over the weekend. Attacks on oil tankers near the Strait of Hormuz have also heightened concerns about disruptions to global energy supplies.
The IMF's projections come as the Energy and Petroleum Regulatory Authority (EPRA) prepares to announce new pump prices for the pricing cycle running from October 15 to November 14.
The announcement will determine whether Kenyan motorists face changes in fuel costs amid continued volatility in international oil markets. The regulator is also preparing to implement the proposed changes to Value Added Tax (VAT) on fuel, following a public participation process.
In Nairobi, the maximum retail pump prices currently stand at Ksh214.03 per litre for Super Petrol, Ksh217.86 for Diesel and Ksh191.38 for Kerosene.
The new prices will be closely watched by motorists, transport operators and businesses, given the influence of fuel costs on public transport fares, freight charges and the prices of goods and services.
