Wartime oil prices continue to benefit Alaska’s state treasury, new figures show

The price of North Slope crude oil topped $100 per barrel on Wednesday, crossing that mark for the first time since June, according to figures published by the Alaska Department of Revenue.

Though the rising cost of diesel, heating oil and gasoline is hitting individual Alaskans hard — nationally, the price of diesel topped $6 per gallon on Thursday — the high cost of crude oil caused by the Iran war continues to increase the amount of money available for services and Permanent Fund dividends in Alaska.

Preliminary figures published Aug. 31 show the state earned just under $7 billion in general-purpose revenue during Fiscal Year 2026, which ended June 30. 

That estimate will be revised and updated later this fall, acting Revenue Commissioner Janelle Earls said in a memo containing the estimate. 

The new figure is more than $500 million above a prediction from March, which itself was another $500 million higher than a prediction from last fall. 

This spring, legislators and Gov. Mike Dunleavy approved $6.4 billion in general-purpose spending on services and this year’s Permanent Fund dividend. 

They also made plans for what would happen if more money was available, and those plans are now being executed, Earls said.

The wartime windfall means another $128 million for Permanent Fund dividends, enough to raise this year’s payment to $1,200 per recipient. Those payments will start Oct. 1. 

It also means an extra $115 million for local school districts and $15 million more for the state’s bulk fuel loan program, which fronts local governments the money needed to buy fuel for the winter.

After that spending, more than $341 million was left over for a deposit into the state’s Statutory Budget Reserve, a savings account that can be accessed with a majority vote of the state House and Senate and the assent of the governor.

Since July 1 and the start of Fiscal Year 2027, oil prices — and thus state revenue — have continued to run ahead of the March forecast.

In March, the Department of Revenue forecast that North Slope oil prices would average $75 per barrel for FY27. Through the first two months of the fiscal year, prices have instead averaged $84 per barrel. 

On Wednesday, President Donald Trump said he does not expect oil prices to decline until after the Nov. 3 midterm elections.

If that holds true, the result would be tens — if not hundreds — of millions of dollars extra for state lawmakers and Alaska’s new governor to budget when the 35th Alaska State Legislature convenes in January.  

Already, the Legislative Finance Division is projecting a $106 million surplus in FY27, according to a newsletter published Sept. 4.