The EIA’s May Short-Term Energy Outlook, released May 12, includes the first meaningful downward revision to the diesel price forecast since global supply disruptions drove prices above $5.60 in April. For Texas contractors who have been managing delivery costs against elevated fuel surcharges for six weeks, the direction has shifted. The EIA now projects on-highway diesel averaging $5.36 per gallon in Q2 2026, down from the prior forecast of $5.61, and $4.94 in Q3, down from $5.00, with the full-year average revised slightly to $4.76 per gallon from $4.80. The weekly retail price for the week of May 25 confirmed at $5.523 per gallon per EIA data via ycharts (Source: EIA via ycharts, May 27, 2026), down from $5.639 the prior week. Arrive Logistics
This is the first week since early April where both the weekly price and the quarterly forecast have moved in the same direction. The May STEO revision reflects improving expectations around global supply conditions gradually normalizing, though the EIA notes that significant uncertainty remains in the outlook. The Q3 forecast of $4.94 per gallon still represents a meaningful premium over where diesel was a year ago, when the national average was approximately $3.58 per gallon per AAA historical data.
“The EIA now projects on-highway diesel will average $5.36 per gallon in Q2 2026 and $4.94 in Q3, both revised downward from the April STEO. The full-year average is now forecast at $4.76 per gallon.” Source: Rigzone, reporting on EIA May 2026 STEO · rigzone.com · May 21, 2026
For Texas contractors managing Q2 and Q3 aggregate delivery costs, the revised forecast has a direct budget implication. Delivery quotes issued at the April peak when diesel was at or above $5.60 may now be higher than the current and projected market warrants. Hauling surcharge tables typically lag spot price changes by one to three weeks, meaning the full benefit of the recent easing may not yet be reflected in current quotes. Getting a refreshed delivered price now captures the direction of the market rather than the spike.
This is also relevant for contractors finalizing Q3 project budgets. The April STEO Q3 projection of $5.00 per gallon was the working assumption for most of May. The revised Q3 projection of $4.94 is a modest improvement, but the direction of the revision matters as much as the magnitude. The EIA has moved from projecting sustained elevated prices to projecting gradual easing. Budgets built on the assumption of continued $5.60-plus diesel are now carrying more conservatism than the revised forecast supports.
The next EIA weekly release is June 2. The next STEO releases June 9. Both will provide the next data points on whether the easing trajectory is continuing. For now, the May 25 weekly price of $5.523 and the revised STEO projections are the most current inputs available.