EIA projects sharp rise in Brent’s price amid ongoing Middle East turmoil

The US Energy Information Administration (EIA) expects the Brent crude spot price to remain above $95/bbl in April and May before falling below $80/bbl in the third quarter of 2026.

IMAGE: Oil storage tanks. Getty Images

The ongoing conflict in the Middle East has roiled global oil markets, with tanker traffic through the Strait of Hormuz – a critical oil transit chokepoint – falling significantly.

“Crude oil prices have risen as petroleum shipments through the Strait of Hormuz have fallen, and some Middle East oil production has been shut in,” the EIA said.

"We forecast the Brent crude oil price will remain above $95/b over the next two months, before falling below $80/b in the third quarter of 2026 and around $70/b by the end of the year" the agency said.

“We assume this shut-in production will gradually ease as transit through the Strait resumes,” the EIA added.

The energy agency has clarified that the price forecast is “highly dependent” on its assumptions of the duration of the US-Irael conflict with Iran and resulting outages in oil production.

It now expects global oil inventories to increase by an average of 1.9 million b/d in 2026, compared with an average build of 2.7 million b/d in 2025, before climbing to an average of 3.0 million b/d in 2027.

“[The] shut-in oil production will peak in early April, mostly in Iraq with smaller volumes in Kuwait, the United Arab Emirates, and Saudi Arabia,” the energy agency said in its March short-term energy outlook (STEO) report.

Supply and demand estimates

Global liquid fuels production is expected to reach 107.04 million b/d in 2026, slightly lower than the EIA’s previous estimate.

Higher oil prices will “lead to more U.S. crude oil production,” according to the EIA. It expects the US to produce about 13.6 million b/d in 2026 and rise to 13.8 million b/d in 2027.

In 2027, total liquid fuels production is projected to touch 109.6 million b/d – about 800,000 b/d higher than its February estimates.

“Once oil flows are reestablished through the Strait of Hormuz, we expect global oil production will continue to outpace consumption over our forecast period,” the EIA said.

OPEC liquid fuels production is expected to average around 33.4 million b/d this year – 900,000 b/d lower than the EIA’s previous projection. The Saudi Arabia-led coalition is expected to increase production to 34.6 million b/d in 2027, the US-based agency said.

“Our current assumption around OPEC+ supply also is contingent on the duration and extent of disruption to oil flows around the Strait of Hormuz,” the EIA said.

The US energy agency forecasts global liquid fuels demand to average 105.2 million b/d in 2026 – about 400,000 b/d higher than its previous forecast.

Global liquid fuels consumption growth will be majorly driven by non-OECD countries, the EIA said, adding that demand is expected to average around 106.6 million b/d in 2027 – about 530,000 higher than its February estimates.

By Aparupa Mazumder

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