Oil Futures For 2027 Have Jumped Almost 20%. Traders Believe Relief Could Take Longer Than Expected.

Oil traders are increasingly betting that high energy costs will persist well into 2027, with crude futures for delivery next year rising sharply since September as the Middle East war disrupts global supplies.

West Texas Intermediate futures for January 2027 delivery reached $97.10 a barrel this week. June contracts have jumped 18% to around $88, while December futures have climbed 13% to about $81, according to FactSet market data.

The increases suggest traders expect oil to remain expensive for longer than they anticipated just weeks ago, although futures prices are not guarantees of what crude will cost when those contracts expire.

The latest figures from the International Energy Agency show the extent of the pressure on global supplies. Oil inventories were 509 million barrels below their prewar levels at the end of September, with onshore stocks falling by 113 million barrels during the month. An increase in oil held aboard ships partly offset that decline, leaving overall inventories down 10 million barrels.

Middle Eastern oil exports are recovering, but supply constraints remain. Crude shipments from Gulf producers increased by 4.4 million barrels a day in September to 13.9 million barrels, reaching more than 75% of prewar levels.

Saudi Arabia led the recovery, using alternative shipping routes and tanker transfers outside the Strait of Hormuz. However, attacks on energy infrastructure and vessels continue to threaten shipments, while longer routes and higher insurance costs have made transportation more expensive.

The IEA expects global oil demand to decline by 2.6 million barrels a day in 2026 as high prices and weaker economic conditions affect consumption. Even with lower demand, the agency forecasts an oil supply deficit through the end of the year.

The U.S. Energy Information Administration's October Short-Term Energy Outlook also points to higher prices ahead. The agency raised its forecast for average Brent crude prices in 2027 to $84 a barrel, up from $74 in September. It also increased its fourth-quarter 2026 forecast by $14 to $105 a barrel.

Brent averaged $114 in September, compared with $91 in August, and briefly reached $131 on September 15 following an attack on Saudi Arabia's East-West oil pipeline.

The EIA expects prices to ease as regional production and shipping capacity recover, with Brent averaging $87 in the second quarter of 2027 and $74 in the final quarter. However, those projections were based on information available through October 1, before the latest increase in futures prices.