War-Torn Oil Prices Fuel Alaska's Treasury Windfall

Alaska's state treasury is enjoying a wartime windfall thanks to record oil prices. The price of North Slope crude oil topped $100 per barrel on Wednesday, marking its first crossing of this mark since June, according to figures from the Alaska Department of Revenue.

Although individual Alaskans are feeling the pinch of high diesel, heating oil, and gasoline prices, with diesel topping $6 per gallon nationally, the state is benefiting from the Iran war-driven surge in crude oil costs. Preliminary figures show that Alaska earned just under $7 billion in general purpose revenue during fiscal year 2026, which ended June 30.

Acting Revenue Commissioner Janelle Earls noted that this new figure is more than $500 million above a prediction from March and another $500 million higher than a forecast from last fall. The increased revenue means an additional $128 million for Permanent Fund dividends, allowing for payments of $1,200 per recipient starting October 1.

There's also extra funding allocated for local school districts ($115 million) and the state's bulk fuel loan program ($15 million). After these allocations, more than $341 million remains in reserve. Oil prices have continued to run ahead of the March forecast since July 1, with North Slope oil averaging $84 per barrel through the first two months of fiscal year 2027.

President Donald Trump predicted that oil prices will not decline until after the November 3 midterm elections, which could result in tens or even hundreds of millions of dollars extra for state lawmakers and Alaska's new governor to budget. The Legislative Finance Division is currently projecting a $106 million surplus in FY27.