The US Energy Information Administration (EIA) raised its average oil price forecast for 2026 on Tuesday, saying that disruptions in the Strait of Hormuz, which was effectively closed following US and Israeli strikes on Iran, have adversely affected global energy supply.
In the agency’s Short-Term Energy Outlook (STEO), the EIA raised its average Brent crude price forecast to $96 per barrel, up from $78.84, while West Texas Intermediate (WTI) crude was revised to $87.41 per barrel from $73.61
For 2027, the EIA expects Brent crude to average $76.09 per barrel, while WTI is projected to average $72.43.
Global oil markets are being driven by heightened volatility following the effective closure of the Strait of Hormuz, a critical chokepoint through which around 20% of global oil supply flows.
The EIA said that Brent crude spot prices averaged $103 per barrel in March, up $32 from February, with daily prices climbing to nearly $128 on April 2.
Before the war, markets were weighed down by oversupply and rising inventories, with strong growth in non-OPEC+ output and higher OPEC+ production targets expected to outpace demand in the next two years. The war in Iran and resulting production shut-ins, however, have shifted market dynamics, prompting an upward revision in oil price forecasts.
Disruptions are expected to persist through the end of 2026, keeping upward pressure on prices. Even if flows through the Strait of Hormuz resume, lingering disruptions to tanker traffic and trade routes are likely to take time to resolve, with the risk of renewed outages expected to keep prices elevated.
As flows gradually recover, shut-in production is expected to return and trade patterns to rebalance. Still, Middle East supply disruptions have intensified, with outages estimated at 7.5 million barrels per day (bpd) in March, rising to a peak of 9.1 million bpd in April before easing. The disruptions are projected to drive a global inventory draw of around 5.1 million bpd in the second quarter of 2026.
Meanwhile, global oil demand expectations have been revised lower amid government-led efforts to curb fuel consumption, supply shortages and restrictions on refined product exports. Demand weakness is expected to be most pronounced in Asia, which remains more reliant on Middle Eastern crude.
The EIA also forecasts US crude oil production to average 13.51 million bpd in 2026, rising to 13.95 million bpd in 2027.
Meanwhile, global oil production is expected to average 104.27 million bpd in 2026, while consumption is estimated at 104.56 million bpd.
In 2027, global supply is forecast to reach 109.47 million bpd, with demand rising to 106.16 million bpd.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr
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