Oil prices tumble after midterm election blowout, putting Alaska’s windfall in question

By SUZANNE DOWNING

Nov. 7, 2026 – Oil prices plunged during election week, trimming the revenue windfall Alaska’s next governor and Legislature could have available as they prepare a new state budget.

Brent crude settled Friday, Nov. 6, at $98.32 per barrel, while West Texas Intermediate closed at $90.83. Both finished roughly 13% lower for the week, according to The Wall Street Journal’s closing report. Friday’s modest gains did little to reverse the damage. Alaska North Slope Crude tracks most closely to Brent.

The retreat has accompanied expectation that the midterm election results will increase pressure for an end to the US-Iran conflict. Oil fell about 8% Wednesday after Democrats wrested control of Congress. Continued threats to Middle East shipping, however, leave prices vulnerable.

For Alaska, the immediate effect is a smaller potential windfall.

The Department of Revenue’s spring forecast assumed Alaska North Slope crude would average $75 per barrel during fiscal year 2027, which began July 1 and ends June 30, 2027.

Even after the global selloff after the election, the major benchmarks are above that level. The fall forecast published by the Alaska Department of Revenue is typically released in early December; last year it was out by Dec. 11.

In October, ANS crude averaged $122.21 per barrel, the fifth-highest monthly average in nominal dollars on record, according to Department of Revenue. Its October premium over Brent averaged $13.91.

If ANS prices remain above the spring forecast’s assumptions, Alaska could still collect more petroleum revenue than projected.

Oil production remains another variable. The spring forecast projected North Slope output averaging 518,500 barrels per day in FY2027.

The next major checkpoint is the Department of Revenue’s fall forecast, which will update the price, production and revenue assumptions available to the incoming administration.

Oil no longer supplies most of Alaska’s unrestricted revenue. The spring forecast projected approximately $6.7 billion in FY2027 unrestricted general fund revenue, including a $4 billion Permanent Fund transfer — about 60% of the total. Alaskans’ Permanent Fund dividends are taxed by the Legislature to complete the spending.

The budget calendar leaves little time for the next governor to absorb the changing outlook. Without a doubt, the very possible winner of the Nov 3 election for governor, Jonathan Kreiss-Tomkins, has already assembled a team to drill into the numbers.

Ranked-choice tabulation is scheduled for Nov. 18, with certification targeted for Nov. 25. Inauguration is Dec. 7. The governor’s proposed budget is due Dec. 15, giving the incoming administration eight days in office before its first budget deadline.

The budget proposal will cover FY2028, beginning July 1, 2027. The current oil-price slide affects FY2027 collections, but the outlook for prices beyond next summer will help shape the new budget.

Agencies and budget staff prepare requests well before inauguration, and the governor will likely submit amendments during the legislative session. Still, the incoming administration will face an immediate decision about how much of the recent oil boom it expects to last.

For households and businesses, lower crude prices could eventually ease gasoline, diesel and heating costs. For the state treasury, they reduce the cushion available for spending and dividends.

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