This blog post is part of a special series based on the October 2026 Commodity Markets Outlook, a report published by the World Bank Group. This series features concise summaries of commodity-specific sections extracted from the report. Explore the full report here.
Front-month Brent crude futures climbed above $115 per barrel (bbl) in late October, then eased to nearly $95/bbl in the first week of November as renewed near-term active conflict in the Middle East appeared less likely. After the Islamic Republic of Iran and the United States failed to reach a follow-on agreement to their June memorandum of understanding, Brent fluctuated between $75/bbl and $100/bbl and then stayed above $100/bbl in September and October. Oil product markets also tightened sharply. The European diesel premium over Brent averaged about $91/bbl in September, a record high, and U.S. retail diesel prices averaged nearly $6.20 per gallon in October.
Middle Eastern crude exports have rebounded, yet the declines in global supply and demand remain historically large. By early October, Middle Eastern oil exports were near 2025 levels, supported by ship-to-ship transfers, untracked shipments, and pipelines bypassing the Strait of Hormuz. Refinery damage delayed the recovery in refined-product exports, including diesel. Global output fell about 9 million barrels per day (mb/d) (8.5 percent) year-on-year in 2026Q2 and 7 mb/d in Q3, largely in Saudi Arabia and Iraq. Gains in six major producers—including Brazil, Kazakhstan, and the United States—offset just 18 percent of gross losses. Supply is projected to fall 5.5 mb/d (5.2 percent) in 2026, the steepest annual decline in over four decades apart from 2020. Consumption fell 5.0 mb/d (4.8 percent year-on-year) in 2026Q2 and 3.7 mb/d (3.4 percent) in Q3, mainly in emerging market and developing economies (EMDEs). China contributed about 35 percent of the decline in EMDE oil consumption, partly as electric vehicles displaced oil. Global demand is projected to shrink 2.6 mb/d (2.5 percent) for the year, a decline surpassed only in 1980 and 2020
