Petroleum products

Brent-WTI spread
In March, the spot price spread between Brent crude oil and West Texas Intermediate (WTI) crude oil priced at Cushing, Oklahoma, widened to an average of $12 per barrel (b) in March, compared with $6/b in February.

The price of Brent crude oil increased more than that of WTI because the Brent crude oil price is more exposed to global crude oil market conditions. An increase in transportation costs, which has been exacerbated by disrupted navigation through the Strait of Hormuz, has reduced the shipping capacity to move crude oil between markets. In addition, WTI price increases were relatively smaller because of above-average domestic inventories and policy interventions in the United States. The U.S. government announced plans for the release of crude oil from the Strategic Petroleum Reserve (SPR) on March 11 and announced a 60-day Jones Act waiver to allow foreign vessels to transport commodities between U.S. ports on March 17.

We forecast U.S. crude oil inventories to remain above average levels, softening the upward price effects on WTI crude oil, relative to Brent. The Brent-WTI spread in our forecast peaks at $15/b in April, when production disruptions are largest. The spread falls to $9/b on average in 3Q26 and $4/b by 4Q26, when we assume most of the disruptions to global crude oil production and trade will dissipate.

U.S. retail gasoline and diesel prices
Higher crude oil prices are leading to higher prices at the pump for gasoline and diesel. We forecast U.S. average retail gasoline price will increase to nearly $4.30 per gallon (gal) in April and the U.S. average retail diesel price will increase to more than $5.80/gal.

Crude oil prices typically constitute around half the total retail price of gasoline and slightly less for diesel. Other factors include refinery margins (found by subtracting crude oil cost from refined product price), retail and distribution margins (subtracting wholesale gasoline costs from pump prices), and taxes.

Most of the increase in retail gasoline prices will be driven by the increased crude oil price and typical seasonal patterns. We forecast U.S. gasoline inventories to be average or above average throughout the forecast period, which contributes to less pressure on refiner and retail margins for gasoline than for diesel.

For diesel, higher refining margins also contribute to the higher retail prices in the forecast period. Although we forecast diesel refining margins to decrease after a few months, the margins remain well above 2025 levels due to continued global supply tightness for diesel fuel. We forecast distillate fuel oil inventories in the United States to remain below the five-year (2021–2025) average in our forecast period.

Europe and Asia both rely on trade with the Middle East to meet their demand for distillate fuel oils, like diesel. Europe has relied on a smaller set of suppliers since 2023, when the European Union implemented a ban on seaborne imports of diesel fuel, commonly called gasoil, from Russia following Russia’s full-scale invasion of Ukraine the previous year.

We forecast U.S. retail gasoline prices to average $3.70/gal in 2026 and $3.46/gal in 2027, both up from $3.10/gal in 2025. Diesel prices average $4.80/gal this year and $4.11/gal in 2027, both up from $3.66 in 2025.