Amid the ongoing Iran war and rapidly diminishing global oil reserves, the U.S. Energy Information Administration (EIA) has upgraded its oil price forecasts for this year.
On Wednesday, the EIA stated that the war has resulted in a substantial decrease in global oil stocks, with an estimated 400 million barrels depleted this year alone. The EIA expects further reductions by the end of the year due to the continued absence of significant Middle Eastern output and export volumes.
Middle East oil production shut-ins jumped to 6.7 million bpd in August from 5 million bpd in July, driven partly by attacks on Saudi oil exports through Bab el-Mandeb and fewer ship departures from Yanbu port, the EIA’s Short-Term Energy Outlook report stated.
The agency now expects global benchmark Brent crude prices to average around $91 a barrel in the spot market in 2026, nearly 5% higher than its previous forecast. U.S. West Texas Intermediate crude prices are also projected to average $84.65 a barrel, reflecting a similar percentage increase from earlier estimates.
“As oil production rises into next year, and as inventories rebuild, we expect the Brent spot price to gradually fall to an average of $74/b in 2027,” the EIA stated.
