The International Monetary Fund (IMF) projects average oil prices will ease in 2027, following a surge in global energy prices triggered by the U.S.-Israel war with Iran.
The lender projects the average price of a barrel of oil will be U.S.$95.74, or about Ksh12,428.34, in 2026.
In 2027, the average price is projected to ease to U.S.$87.39, or about Ksh11,344.40 at current exchange rates.
The 2027 projection would, however, still be more than U.S.$17 (Ksh2,206.83) above the average price of Brent crude oil before the war began on February 28, 2026.
An image of Matatus in the busy streets of Nairobi, with a fuel pump with fuel drop on the side.
Photo
Kenyans.co.ke
Oil prices have surged by more than 70 per cent this year as the conflict rattled global energy markets.
Before the war, Brent crude traded at around U.S.$70 (Ksh9,086.94) per barrel, although prices varied between approximately U.S.$66 and U.S.$ 72 depending on the day.
The projection comes as global oil prices slipped on Tuesday, October 13, with Brent crude falling to about U.S.$105 a barrel.
The decline followed US President Donald Trump's announcement that Russia had agreed to supply diesel to global markets.
Trump temporarily eased US sanctions on Russian fuel, with experts saying additional supplies could ease tightness in global fuel markets and reduce some supply concerns.
However, concerns remain after Iran-aligned Houthis reportedly struck Riyadh's international airport over the weekend, while attacks on tankers were reported near the Strait of Hormuz.
The IMF's forecast comes as the Energy and Petroleum Regulatory Authority (EPRA) prepares to announce new fuel prices for the pricing cycle running from October 15 to November 14.
In Nairobi, the maximum retail pump prices are currently set at Ksh214.03 per litre for Super Petrol, Ksh217.86 per litre for Diesel and Ksh191.38 per litre for Kerosene.
A petrol tanker transporting fuel along Thika Super Highway, November 13, 2019.
Kenyans.co.ke