The U.S. Energy Information Administration (EIA) expects recent developments in global trade policy and oil production to contribute to lower global demand for petroleum products through 2026, contributing to lower oil prices than the agency previously forecasted.
EIA also forecasts natural gas prices to increase from historic lows in 2024 in its latest Short-Term Energy Outlook (STEO).
Key highlights from the May STEO include:
Oil supply, demand, and prices: EIA expects the Brent crude oil price to average about $66 per barrel in 2025 and about $59 per barrel in 2026, both significantly lower than the 2024 average of $81 per barrel.
Compared with the January STEO—the first STEO to include forecasts for 2026—EIA’s current forecast for global petroleum demand is about 500,000 barrels per day lower. EIA expects lower demand for petroleum products—such as gasoline, diesel, and jet fuel—along with increased oil production will lead to a generally oversupplied oil market, pushing oil prices down; EIA’s May forecast for 2026 oil prices is $8 per barrel lower than its January forecast.
As with all EIA forecasts, its forecast for crude oil prices is highly uncertain, specifically related to possible changes in U.S. and global crude oil production and petroleum demand trends. Notably, EIA concluded this forecast on May 1, which was before the latest OPEC+ meeting, on May 3.