Oil Hits $108 a Barrel, Up 70% in a Year

Brent crude traded at $108.04 per barrel as of 6:45 a.m. Eastern Time on October 12, 2026 — up $2.32 from the previous morning and roughly $44.50 higher than a year ago. That works out to a 70.16% annual gain for the world's main oil benchmark.

The move is not a one-day anomaly. A month ago, Brent sat at $106.02, meaning prices have added another 1.90% over the past four weeks. Yesterday's close was $105.72, so the overnight jump of 2.19% continues a steady upward grind rather than a sudden spike.

What does the price of oil actually depend on?

Nobody can predict oil prices with certainty. The core driver is supply and demand, and both shift with headlines: threats of economic downturn, war, and OPEC+ decisions can turn the trajectory rapidly.

In the U.S., prices also respond to how friendly an administration is to drilling, because policy shapes future supply. 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 limits on Arctic drilling.

The price also updates constantly. Oil futures markets function as continuous auctions where traders agree to buy or sell oil in the future — as long as contracts trade, the price moves.

How do oil prices reach the gas pump?

A gallon of gas carries costs far beyond crude: refineries, wholesalers, taxes, and local station markups all take a share. But crude oil still dominates the equation, typically accounting for more than half of the price per gallon.

The pass-through is asymmetric, according to the source. When oil prices spike, gas prices follow quickly. When oil falls, gas prices drift down slowly — a pattern economists call "rockets and feathers."

What role does the Strategic Petroleum Reserve play?

The U.S. Strategic Petroleum Reserve exists to guard energy security in emergencies — sanctions, severe storm damage, even war. It can soften crippling price hikes during supply shocks.

It is not a long-term fix. The reserve functions as immediate relief for consumers and as a bridge that keeps critical parts of the economy running, including key industries, emergency services, and public transportation. Separately, the International Energy Agency is currently pushing to empty its oil reserves faster, according to Fortune's recent coverage.

How are oil and natural gas prices linked?

A big move in oil can shift natural gas demand. When oil prices rise, some industries swap natural gas into segments of their operations where possible, which pushes natural gas demand — and prices — higher in turn.

Why does Brent set the global standard?

Two benchmarks dominate oil pricing:

• Brent crude — the main global oil benchmark, pricing much of the world's traded crude.
• West Texas Intermediate (WTI) — the main benchmark for North America.

The U.S. Energy Information Administration now uses Brent as its primary reference in its Annual Energy Outlook, a sign of how thoroughly Brent has become the default measure of global oil performance.

What does history say about oil's volatility?

Oil's track record across decades is defined by shocks in both directions:

• Early 1970s — the first big oil shock, when Middle East producers cut exports and imposed an embargo on the U.S. and others during the Yom Kippur War.
• Mid-1980s — prices dropped on lower demand and more non-OPEC producers entering the industry.
• 2008 — prices spiked on global demand, then plummeted alongside the financial crisis.
• 2020 — COVID lockdowns collapsed demand like never before, sending prices below $20 per barrel.

Wars, recessions, OPEC whims, and evolving energy policies have repeatedly whipsawed the market.

How does expensive oil hit the broader economy?

When oil is expensive, everyday items cost more. The effect runs through direct energy costs — heating and gas utilities — and through logistics. Shipping costs raise grocery prices because it becomes more expensive to move products from warehouses and farms to the shelf.

U.S. shale production adds a supply-side counterweight. The more shale the U.S. taps, the greater the supply, and the less prone prices are to spiking sharply.

With Brent up more than 70% year over year and still climbing monthly, the inflationary pass-through into shipping, utilities, and consumer goods is the number businesses and households will watch next.