As of 6:15 a.m. Eastern Time on August 13, 2026, Brent crude oil traded at $90.28 per barrel, representing a decline of $1.32 from the prior morning. The current price sits roughly $24 higher than its level one year ago, a gap that reflects ongoing supply management by producing nations and continued global demand even as economies navigate mixed growth signals. At the $90 level, Brent remains in a range that historically tends to feed through to elevated consumer fuel and transportation costs.

Factors Driving Oil Price Volatility

Oil prices remain inherently unpredictable, governed primarily by the fundamental forces of supply and demand even as numerous other variables influence trading. Among the most consequential supply-side factors are production decisions by OPEC+, the coalition of major oil-producing nations that coordinates output levels to influence market supply. Prices can swing sharply during periods of heightened concern over recession, armed conflict, or other major disruptions to global markets.

From Barrel to Pump: How Oil Prices Affect Gasoline Costs

The price paid at the gasoline pump reflects a combination of several cost components. Crude oil represents one portion, but consumers also cover expenses related to refineries, wholesalers, government taxes, and retail markups set by gas stations.

Since crude oil typically accounts for more than half the per-gallon price, it exerts the greatest influence on pump costs. Sharp increases in oil prices almost always pass through to consumers quickly at the pump. Conversely, declines in oil prices tend to produce slower, more gradual reductions in gasoline prices—a phenomenon economists refer to as the "rockets and feathers" effect.

The U.S. Strategic Petroleum Reserve

The United States maintains a stockpile of crude oil known as the Strategic Petroleum Reserve (SPR), designed to serve as an emergency energy safeguard during crises such as sanctions, severe storm damage, or armed conflict. The SPR can also help blunt acute price spikes when supply disruptions occur. The reserve's levels have been the subject of ongoing policy debate, particularly following significant drawdowns in recent years that drew down stored capacity to historically low levels.

The reserve is not intended as a long-term solution. Rather, it functions as an immediate safety net to support consumers and sustain critical sectors of the economy, including key industries, emergency services, and public transportation.

The Link Between Oil and Natural Gas Markets

Oil and natural gas are two of the world's primary energy sources, and significant shifts in oil prices can carry downstream effects on natural gas markets. For instance, when oil prices rise, certain industries may substitute natural gas for oil in specific operational areas wherever feasible, thereby increasing demand for natural gas.

Historical Performance of Oil

The global oil market is commonly tracked against two key benchmarks:

• Brent crude oil — the primary global oil benchmark
• West Texas Intermediate (WTI) — the primary North American benchmark

Brent is widely regarded as offering a clearer picture of global oil market performance, as it prices much of the world's traded crude. It is also frequently the preferred gauge for historical oil trend analysis. The U.S. Energy Information Administration now uses Brent as its primary reference point in its Annual Energy Outlook.

Examining the Brent benchmark over multiple decades reveals a market characterized by persistent volatility, with sharp increases driven by wars and supply cuts alongside steep declines tied to global recessions and oversupply conditions, commonly referred to as a "glut." Notable historical episodes include:

• Early 1970s: The first major oil shock occurred when Middle Eastern producers slashed exports and imposed an embargo on the United States and other nations during the Yom Kippur War.
• Mid-1980s: Prices declined amid factors including reduced demand and the entry of additional non-OPEC oil producers into the market.
• 2008: Prices surged on increased global demand before plunging in tandem with the global financial crisis.
• 2020: During COVID-19 lockdowns, oil demand collapsed at an unprecedented rate, driving prices below $20 per barrel.

Oil's historical performance has been shaped by wars, recessions, OPEC production decisions, evolving energy policies, and a wide range of other geopolitical and economic forces.

Frequently Asked Questions

What determines the current price of oil per barrel?

The price of oil per barrel depends primarily on supply and demand dynamics, including expectations about future supply and demand shaped by geopolitical developments and OPEC+ decisions. In the United States, prices also respond to administration policies on drilling, which can influence future supply projections. In 2025, the Trump administration 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 Biden administration's restrictions on Arctic oil drilling.

How often does the oil price change?

The price of oil updates continuously while futures markets are open. A futures market functions as an auction in which participants agree to buy or sell oil at a future date. As long as trading activity continues, the oil price remains in flux.

What is shale's role in oil supply?

Shale is sedimentary rock containing oil and natural gas reserves. Greater access to shale deposits expands available energy supply, which can help moderate price spikes through increased production capacity.

How do high oil prices affect everyday costs?

When oil becomes expensive, the cost of everyday goods tends to rise. This effect extends beyond direct energy expenses such as heating and gas utilities. Transportation and logistics costs—shipping products from warehouses and farms to store shelves—can also drive up prices at the grocery store and elsewhere.

This story was originally featured on Fortune.com.