Oil
U.S. inflation expected to ease despite high oil prices
Economists predict moderated September inflation figures in the United States as the Federal Reserve weighs upcoming interest rate decisions amid elevated crude markets.
Key points
- Economists forecast headline inflation growth of 0.5% month-over-month for September.
- The probability of a Federal Reserve interest rate hike in late October has dropped significantly.
- The U.S. and Russia reached a deal to supply Russian diesel to help curb rising fuel costs.
What happened
Economists anticipate that key U.S. inflation indicators continued to slow down through September, even as crude oil prices remained high. Headline inflation is projected to reach 0.5% month-over-month and up to 3.7% year-over-year. Meanwhile, core consumer price metrics, which omit volatile food and energy costs, are expected to rise moderately. Consequently, market expectations for an interest rate increase by the Federal Reserve at its late October meeting have fallen sharply compared to previous weeks.
Oil prices have retreated from recent peaks but continue to trade at elevated levels. Brent crude was recorded at $104.60 per barrel, while West Texas Intermediate traded at $91.89 per barrel. In the refined products market, U.S. gasoline averages have declined over the past month, though diesel prices remain stubborn.
Why it matters
To address surging fuel costs, an agreement was struck between U.S. President Donald Trump and Russian President Vladimir Putin to introduce Russian diesel supplies to international markets. The arrangement involves an initial release of over 300,000 metric tons, followed by subsequent allocations later in the year. To facilitate the transfers, the U.S. Treasury Department issued a general license pausing specific sanctions on Russian diesel shipments until April 2027.
Despite the policy shift, energy analysts have questioned the impact of the incoming volumes. The initial delivery represents a fraction of daily U.S. fuel consumption, while broader middle distillate markets remain constrained by infrastructure damage from recent conflicts affecting Russian refinery output.
What comes next
The temporary sanctions exemption has drawn criticism from lawmakers and European officials, who argue the measure undermines existing restrictions on Moscow. As markets await the official September consumer price data, observers will monitor whether broader pass-through effects from energy costs begin to materialize across retail and manufacturing sectors in the coming quarters.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Crude benchmarks move budgets, currencies and inflation in producer and importer countries alike. For economies such as Nigeria, where fuels dominate exports, production and refining decisions move the whole economy.
9.5% of world merchandise exports were fuels in 2025Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
