SINGAPORE, March 26, 2026, 17:19 SGT
Crude rallied on Thursday as prospects for a swift Middle East ceasefire faded, keeping fuel costs elevated for drivers. Brent crude last changed hands at $104.30 a barrel at 0638 GMT, with U.S. West Texas Intermediate at $92.25. Regular gasoline in the U.S. stuck at an average of $3.981 per gallon.
The jump in crude has started to show up at the pump. According to AAA, regular gas was at $3.981 a gallon on Thursday—barely changed from Wednesday’s figure. Diesel averaged $5.375. Regular gasoline is now running roughly $1 above where it was a month back.
Iran is weighing a U.S. plan to halt the conflict but says it isn’t interested in negotiations. Washington, for its part, threatened tougher action against Tehran if the offer isn’t accepted. The Strait of Hormuz—a critical passage that typically moves around 20% of global crude and LNG—remains largely blocked. The International Energy Agency has described this as the largest disruption to oil supplies on record. “Optimism regarding a ceasefire has faded,” said Tsuyoshi Ueno, senior economist at NLI Research Institute. Reuters
U.S. government data out this day gave traders little to cheer about. The Energy Information Administration reported a 6.9 million barrel jump in commercial crude stocks last week, putting inventories at 456.2 million. Gasoline supplies dropped by 2.6 million barrels but still sat 3% higher than the five-year average. Refineries cranked along at 92.9% capacity, and gasoline production edged up to 9.7 million barrels a day.
Washington took steps this week to cushion the impact. The Environmental Protection Agency announced a 20-day suspension on certain anti-smog restrictions for seasonal gasoline, starting May 1. That clears the way for wider E15 sales—fuel with 15% ethanol. Analysts expect the shift might shave a few cents off prices at the pump, but not right away.
Gas prices aren’t hitting every state the same way. On Thursday, California drivers faced the steepest average for regular, paying $5.843 per gallon. Hawaii and Washington followed, clocking in at $5.332 and $5.300, respectively. The cheapest fill-ups? Oklahoma at $3.256, with Kansas just a hair higher at $3.273.
The fallout isn’t limited to U.S. motorists. South Korea will boost fuel-tax reductions starting Friday, with gasoline taxes dropping to 15% from 7% and diesel to 25% from 10%. Over in Chile, the government moves to pass through more of the global oil price surge beginning March 26, pushing the 93-octane price up by 370 pesos per liter.
Investors are taking the surge in oil as a signal of ongoing inflation pressures, not just tighter supply. “One peace rumour does not undo the inflation and rates damage already in the system,” said Charu Chanana, chief investment strategist at Saxo, with Brent crude on track for a more than 40% monthly rise. Reuters
The way forward isn’t linear. Barclays flagged that a prolonged closure of Hormuz could knock 13 million to 14 million barrels a day off the market. Still, the bank’s base scenario expects shipping to return to normal by early April, backing its forecast for Brent to average around $85 a barrel in 2026. If the disruption drags into late April or May, though, Barclays sees late-2026 Brent contracts potentially jumping to $100 or even $110.
With crude holding above $100 and gasoline prices close to $4, options for policymakers are tight. Norway’s parliament is set for a Thursday vote on reducing petrol and diesel taxes, while Austria has acted already—rolling out tax relief and capping margins for refiners and retailers.
