Oil prices stood at $101.43 (£?) a barrel at 7.30am Eastern time, down $4.38 from the previous morning but still around $35.50 higher than a year earlier.
The figure is based on the Brent crude benchmark, which is widely used to track global oil performance. Brent was priced at $105.81 a barrel the previous day, while the comparable level a month ago was $97.87 and the price a year ago was $65.94.
That means the latest price was 4.13% lower than yesterday’s level, 3.63% higher than a month ago and 53.82% above its position a year earlier.
What is driving oil prices?
The direction of oil prices is determined largely by supply and demand, as well as expectations about future production and consumption. Geopolitical developments and decisions by OPEC+ can quickly alter those expectations.
Oil prices can also shift sharply when the risk of war or a recession increases. A recession may weaken demand, while conflict or supply restrictions can threaten the amount of crude available to the market.
In the United States, government policy towards drilling can affect expectations of future supply. The Trump administration in 2025 moved to reopen more than 1.5 million acres in the Coastal Plain of the Arctic National Wildlife Refuge for oil and gas leasing, reversing the previous administration’s policy of limiting drilling in the Arctic.
Prices change continually while oil futures markets are open. These markets allow people and companies to agree to buy or sell oil at a future date, with the price moving as contracts are traded.
How crude oil prices affect fuel and inflation
The cost of crude oil is only one part of the price paid at the pump. Refining, wholesaling, taxes and the retailer’s mark-up also contribute to the final price.
Crude oil nevertheless often accounts for more than half of the cost of a gallon of fuel. Rising oil prices generally push pump prices higher, while falls in crude can take longer to feed through to consumers – a pattern sometimes described as “rockets and feathers”.
Expensive oil can also add to inflation by increasing the cost of energy and utilities. Transport costs may rise too, making it more expensive to move goods from farms and warehouses to shops.
Oil and natural gas are both major energy sources, and movements in one market can affect the other. If oil becomes more expensive, some industries may switch to natural gas where possible, increasing demand for it.
Brent and WTI benchmarks
Brent crude is the principal global oil benchmark, while West Texas Intermediate, or WTI, is the main benchmark for North America.
Brent is considered a stronger guide to global performance because it prices a large proportion of the world’s traded crude. It is also used to follow long-term trends, including by the US Energy Information Administration in its Annual Energy Outlook.
The benchmark has experienced significant rises and falls over several decades. Prices surged during the first major oil shock in the early 1970s, when Middle Eastern countries cut exports and imposed an embargo on the US and other countries during the Yom Kippur War.
They declined in the mid-1980s amid weaker demand and an influx of oil from producers outside OPEC. Prices then rose sharply in 2008 as global demand increased before collapsing during the global financial crisis.
Demand fell to an unprecedented level during the Covid-19 lockdowns in 2020, sending oil prices below $20 a barrel.
The US Strategic Petroleum Reserve
The US maintains a reserve of crude oil for emergencies, known as the Strategic Petroleum Reserve. It is intended to support energy security during crises including sanctions, severe storm damage and war, and can help soften the impact of sudden supply shocks.
The reserve is not designed to resolve long-term supply problems. Instead, it can provide short-term relief for consumers and help essential industries, emergency services and public transport continue operating during a crisis.
US shale production can also influence prices. Shale rock contains oil and natural gas, and increased access to those resources can expand supply and reduce the likelihood of sharp price spikes.
