Brent Crude Forecast Revised to $90 in Q4 as Prices Surge Beyond Expectations

If you filled up your tank this weekend at the Shell station on the corner of Lamar and Barton Springs, you probably winced at the numbers rolling by. That pain isn’t going away anytime soon—and it’s about to get worse before it gets better. Goldman Sachs just ratcheted up its oil-price forecast for the fourth quarter of 2026, now expecting Brent crude to average $90 a barrel, a full $10 higher than its previous outlook. For Austinites already stretching paychecks to cover $4.50-a-gallon gas, this isn’t just Wall Street chatter; it’s a looming squeeze on everything from your morning I-35 commute to the price of avocados at H-E-B.

The catalyst? A supply shock that’s now entering its fourth month. Since mid-January, the Strait of Hormuz—through which roughly one-fifth of the world’s oil flows—has been effectively closed to commercial traffic. Tankers that once ferried 14.5 million barrels a day from Saudi Arabia, Iraq, and the UAE to refineries in Houston and Port Arthur are now rerouted around the Cape of Great Hope, adding 10–12 days to each voyage. Goldman’s analysts call the resulting inventory draw “exceptional,” with global crude stockpiles falling by 11–12 million barrels daily. To put that in Texas terms, it’s like draining the entire Strategic Petroleum Reserve in under two weeks.

What’s striking is how quickly the math flips. In February, Goldman’s base case assumed the Strait would reopen by mid-May. Now, the bank has pushed that timeline to late June, and even that feels optimistic. The U.S. Energy Information Administration (EIA) hasn’t updated its official forecasts since April 1, but internal briefings shared with Texas Railroad Commission staff last week suggest the agency is privately modeling a $95–$100 Brent range by September if the closure persists. That’s the same range that triggered the 2008 gasoline-price spike, when Austin saw regular unleaded hit $4.11 a gallon at the height of summer driving season.

The ripple effects aren’t confined to your wallet at the pump. Austin’s logistics sector, which moves everything from Dell laptops to Tesla gigafactory components along I-35 and SH 130, is already seeing spot freight rates climb 8–10% month-over-month. Trucking firms like Central Freight Lines, which operates a major terminal near the Austin-Bergstrom International Airport, have begun adding fuel surcharges of $0.22 to $0.35 per mile on long-haul routes to Dallas and San Antonio. Those costs inevitably trickle down to consumers: the Austin Chamber of Commerce’s latest supply-chain survey shows 62% of local manufacturers expect to raise prices on finished goods by at least 3% in the third quarter, citing diesel costs as the primary driver.

Then there’s the less visible, but equally insidious, impact on Austin’s signature industries. The city’s tech sector, which employs over 180,000 people, is particularly sensitive to energy-price volatility. Semiconductor fabrication plants, like Samsung’s $17 billion Taylor facility just 30 miles northeast of downtown, consume vast amounts of electricity—much of it generated by natural gas. When oil prices rise, gas prices typically follow within 30–60 days, squeezing margins for chipmakers already grappling with post-pandemic supply-chain bottlenecks. A Goldman research note last week specifically flagged the semiconductor industry as “highly exposed” to sustained $90+ oil, warning that capital expenditure budgets could be slashed by 5–7% if prices remain elevated through 2027.

For Austin’s burgeoning green-energy sector, the news is a double-edged sword. On one hand, higher oil prices make solar and wind projects more competitive. Austin Energy, the city-owned utility, has already accelerated its timeline for retiring the Decker Creek gas plant, now aiming for full decommissioning by 2029 instead of 2032. The utility’s latest integrated resource plan, released in March, projects that every $10 increase in the price of a barrel of oil adds roughly $3.5 million annually to the cost of running gas-fired peaking plants—money that can now be redirected toward battery storage and grid modernization.

the same supply-chain disruptions that are driving up diesel prices are also delaying shipments of solar panels and wind-turbine components. The Port of Houston, which handles 70% of Texas’s renewable-energy imports, has seen average dwell times for cargo double since February. A recent survey by the Texas Renewable Energy Industries Alliance found that 43% of its Austin-based members have experienced project delays of 4–6 weeks due to equipment shortages, with some reporting cost overruns of up to 12%. “It’s a classic case of the cure being as disruptive as the disease,” said one anonymous project manager at a downtown-based solar developer. “We’re racing to replace fossil fuels, but we’re still dependent on the same global logistics network that’s being strangled by this oil shock.”

Local policymakers are caught in a bind. The Austin City Council’s Climate Equity Plan, adopted in 2021, calls for reducing transportation emissions by 50% by 2030. Yet higher gas prices, while theoretically encouraging mode shift to transit and biking, are also straining the budgets of low-income residents who rely on cars for function. Capital Metro, Austin’s transit agency, has seen ridership on its MetroRapid bus routes drop 9% since January, even as it expands service. “When gas hits $4.50, people who can afford to drive will drive, and those who can’t will cut back on trips altogether,” said CapMetro’s chief planning officer in a recent interview with the Austin American-Statesman. The agency is now considering a temporary fare freeze or even a gas-price subsidy program for low-income riders, but funding sources remain unclear.

At the state level, the Texas Railroad Commission, which regulates oil and gas production, has so far resisted calls to tap the state’s 300 million barrel Strategic Petroleum Reserve. Commissioner Wayne Christian argued in a press release last week that “Texas must lead by example and keep our powder dry” until prices cross the $110 threshold. That stance puts the state at odds with the Biden administration, which has already authorized two releases from the federal SPR since February. The tension underscores a broader geopolitical reality: with Iran and the U.S. Still deadlocked over nuclear talks, and Saudi Arabia refusing to increase production until the Strait reopens, the market is effectively in a state of suspended animation. “We’re in uncharted territory,” said a senior analyst at the Federal Reserve Bank of Dallas, who spoke on condition of anonymity. “The last time we saw a supply shock of this magnitude was 1973, and back then, the U.S. Was a net importer. Today, we’re the world’s largest producer, but we’re still hostage to global logistics.”

For Austin’s small businesses, the timing couldn’t be worse. The city’s hospitality sector, still recovering from the 2020–2021 downturn, is bracing for a summer slowdown. Hotels along South Congress Avenue report that corporate travel bookings for June and July are down 15% compared to 2023, with many companies citing “budget constraints” related to fuel costs. Restaurants, already operating on razor-thin margins, are facing a triple whammy: higher ingredient costs (especially for imported goods like olive oil and coffee), rising delivery fees, and a pullback in discretionary spending. “We used to notice a 20% uptick in patio seating when the weather warmed up,” said the owner of a popular Mexican restaurant on East Sixth Street. “This year, we’re seeing more takeout orders and fewer walk-ins. People are still coming out, but they’re being more careful with their dollars.”

Even Austin’s iconic music scene isn’t immune. Live Nation, which operates the Austin360 Amphitheater, has begun adding a $2–$5 “fuel surcharge” to ticket prices for summer concerts, citing increased costs for tour buses and equipment trucks. Local venues like Antone’s and The Continental Club are considering similar fees, though some owners worry it could backfire. “Austin’s music fans are loyal, but they’re not made of money,” said one venue manager. “If we start nickel-and-diming them, they might just stay home and stream.”

So what’s an Austinite to do? The short answer: prepare for higher costs across the board, but also seem for opportunities to mitigate the impact. Here’s how this trend is likely to play out in the coming months, and what you can do about it.

The Near-Term Outlook: What to Expect in Austin

Gasoline prices in Central Texas typically peak in late June or early July, coinciding with the start of summer driving season. This year, analysts expect that peak to arrive earlier—possibly as soon as mid-May—and linger longer. The EIA’s most recent Short-Term Energy Outlook (released April 9) projected that U.S. Regular gasoline prices would average $3.85 a gallon in the second quarter, but that forecast was made before Goldman’s latest revision. Local experts now expect Austin to see $4.20–$4.40 a gallon by Memorial Day, with a 30% chance of hitting $4.75 if the Strait remains closed through July.

Electricity bills are also poised to rise. Austin Energy, which serves over 500,000 customers in the metro area, adjusts its fuel charge quarterly based on natural gas prices. The utility’s April 1 filing with the Public Utility Commission of Texas showed a 4.2% increase in the fuel factor, effective May 1. If natural gas prices follow oil higher, as they typically do, customers could see another 5–7% hike in the July billing cycle. For the average Austin household, that translates to an extra $15–$20 per month.

Inflation, which had been cooling in early 2026, is likely to reaccelerate. The Federal Reserve Bank of Dallas’s Texas Economic Indicators report for April noted that energy costs account for about 8% of the local Consumer Price Index (CPI) basket. A sustained $10 increase in oil prices adds roughly 0.8 percentage points to headline inflation. That might not sound like much, but it’s enough to push Austin’s CPI—currently running at 3.1% year-over-year—back above the Fed’s 2% target, potentially delaying any interest-rate cuts until late 2026 or early 2027.

Second-Order Effects: The Hidden Costs of Higher Oil

Beyond the obvious pain at the pump and on your utility bill, higher oil prices have a way of seeping into corners of the economy you might not expect. Here are a few Austin-specific examples:

• Real Estate: Mortgage rates, which have been hovering around 6.5% since early 2026, could tick up another 0.25–0.50 percentage points if inflation expectations rise. That might not sound like much, but for a $400,000 home in Mueller or Circle C, it adds $100–$200 to the monthly payment. The Austin Board of Realtors has already reported a 7% drop in pending home sales in March, the steepest decline since 2020. Higher rates could further cool the market, especially for first-time buyers.
• Local Government: The City of Austin’s budget is highly sensitive to fuel costs. The Austin Police Department, Austin Fire Department, and Austin Public Works all operate large fleets of vehicles, and the city’s fuel budget for FY 2026 was based on an average price of $3.20 a gallon. With prices now expected to average $3.80–$4.00, the city could face a $10–$12 million shortfall, forcing cuts to non-essential services or delays in capital projects like the expansion of the Austin Convention Center.
• Public Health: Higher transportation costs disproportionately affect low-income residents, who spend a larger share of their income on gas and groceries. The Central Texas Food Bank has seen a 12% increase in demand since January, and its CEO warned in a recent interview that “if gas prices stay high, we could see a 20–25% surge in clients by the end of the year.” The Travis County Health and Human Services Department is also bracing for an uptick in food insecurity-related health issues, such as diabetes and malnutrition, especially among children and the elderly.
• Tourism: Austin’s reputation as a “weird” and affordable alternative to pricier coastal cities is at risk. The Austin Convention & Visitors Bureau’s latest Visitor Impact Report shows that 68% of leisure travelers cite “affordability” as a key reason for choosing Austin. If gas prices stay elevated, those travelers may opt for closer-to-home destinations like San Antonio or Houston, which are both within a three-hour drive for most Texans. The city’s hotel occupancy rate, which averaged 72% in 2023, could dip below 65% this summer, putting pressure on local businesses that rely on tourist dollars.

What You Can Do: Strategies for Austinites

While there’s no way to completely shield yourself from the impact of higher oil prices, there are steps you can capture to mitigate the damage. Here are a few strategies tailored to Austin’s unique economy and culture:

• Optimize Your Commute: If you live within 5 miles of your workplace, consider biking or using an e-scooter. Austin’s bike-share program, Austin B-Cycle, has expanded to over 100 stations across the city, and the new “Bike Boulevard” along Lamar Boulevard makes cycling safer than ever. For longer commutes, Capital Metro’s MetroRapid routes (especially the 801 and 803) offer frequent service and dedicated lanes, cutting travel times by up to 20%. If you must drive, apps like GasBuddy can help you find the cheapest fuel in your area, and tools like Waze can help you avoid traffic jams that waste gas.
• Reduce Home Energy Costs: Austin Energy offers free home energy audits through its Energy Efficiency Programs. A typical audit identifies $200–$400 in annual savings, with no-cost measures like sealing air leaks and installing smart thermostats. The utility also offers rebates for energy-efficient appliances, including up to $500 for a new heat-pump water heater. If you’re a renter, talk to your landlord about these programs—many are eligible for multi-family properties.
• Shop Smarter: Local farmers’ markets, like the Austin Farmers’ Market at Mueller, often have lower prices than grocery stores for fresh produce, and they cut out the middleman (and the fuel costs of shipping). The city’s “Double Dollars” program, which matches SNAP benefits at farmers’ markets, can stretch your food budget even further. For non-perishables, consider bulk-buying clubs like Costco or Sam’s Club, which can offer savings of 10–20% on staples like rice, beans, and cooking oil.
• Explore Alternative Transportation: If you’re in the market for a new car, consider an electric or hybrid vehicle. Austin Energy’s EV Incentives Program offers rebates of up to $1,200 for the purchase or lease of a new or used electric vehicle, and the federal tax credit can add another $7,500. Even if you’re not ready to buy, carpooling apps like Scoop or Waze Carpool can help you split the cost of gas with neighbors who have similar commutes.
• Advocate for Policy Changes: Austin’s city council is currently debating a package of measures aimed at reducing the city’s dependence on fossil fuels. These include expanding the bike lane network, increasing funding for public transit, and offering incentives for solar panel installation. You can make your voice heard by attending council meetings (held every other Thursday at City Hall) or submitting comments online. The Climate Equity Plan is also up for review this summer, and public input will shape its final version.

Given my background in energy policy and local economic development, if this trend impacts you in Austin, here are the three types of local professionals you need to realize about:

Energy Efficiency Consultants

These specialists help homeowners and businesses reduce their energy consumption, saving money and lowering their carbon footprint. In Austin, look for consultants who:

• Are certified by the Building Performance Institute (BPI) or the Residential Energy Services Network (RESNET).
• Have experience working with Austin Energy’s rebate programs, such as the Home Performance with ENERGY STAR program.
• Offer comprehensive audits that include blower-door tests, infrared imaging, and duct-leakage assessments.
• Provide clear, actionable reports with cost-benefit analyses for recommended upgrades.
• Have strong reviews from Austin-area clients, particularly in neighborhoods like Hyde Park, Mueller, or Circle C, where older homes may have hidden inefficiencies.

Why they matter: With electricity prices poised to rise, an energy efficiency consultant can help you identify low-cost upgrades that pay for themselves in 1–3 years. For example, sealing air leaks and adding attic insulation can reduce cooling costs by 10–20% in Austin’s hot climate.

Transportation Demand Management (TDM) Specialists

These professionals work with employers, schools, and local governments to reduce single-occupancy vehicle trips, easing traffic congestion and lowering fuel costs. In Austin, seek out TDM specialists who:

• Are affiliated with the Texas Department of Transportation (TxDOT) or the Capital Area Metropolitan Planning Organization (CAMPO).
• Have experience designing and implementing programs like vanpooling, telecommuting, or flexible work schedules.
• Can provide data-driven analyses of commute patterns, including mode split (e.g., % of employees driving alone vs. Carpooling) and carbon footprint reductions.
• Offer turnkey solutions, such as on-site bike repair stations, shower facilities for cyclists, or transit pass subsidies.
• Have worked with major Austin employers, such as Dell, IBM, or the University of Texas at Austin, to reduce parking demand and improve employee satisfaction.

Why they matter: If you’re a business owner or HR manager, a TDM specialist can help you design programs that reduce your employees’ commuting costs while also qualifying for tax incentives or grants. For example, the Clean Air Force of Central Texas offers grants of up to $10,000 for employers who implement commuter benefits programs.

Local Economic Development Advisors

These experts help small businesses and nonprofits navigate the economic challenges posed by higher oil prices, from securing grants to diversifying revenue streams. In Austin, prioritize advisors who:

• Are certified by the International Economic Development Council (IEDC) or have advanced degrees in economic development or public policy.
• Have deep ties to Austin’s business community, including relationships with the Austin Chamber of Commerce, the Small Business Development Center (SBDC), or the City of Austin Economic Development Department.
• Specialize in sectors that are particularly vulnerable to energy-price shocks, such as hospitality, logistics, or manufacturing.
• Offer tailored services, such as cash-flow analysis, grant-writing assistance, or strategic planning for cost reduction.
• Have a track record of helping Austin businesses secure funding, such as the City of Austin’s Small Business Relief Grant or the Texas Enterprise Fund.

Why they matter: If you’re a small business owner, an economic development advisor can help you identify opportunities to pivot your business model, access low-interest loans, or tap into local resources. For example, the Austin Public Library offers free workshops on topics like “Managing Cash Flow in Uncertain Times,” and the Texas Workforce Commission provides wage subsidies for businesses that hire and train new employees.

Ready to find trusted professionals? Browse our complete directory of top-rated experts in the Austin area today.