The U.S. Energy Information Administration raised its 2026 and next-year oil price forecasts as the Iran war drains global stockpiles. Brent crude is now seen averaging about $91 a barrel this year and WTI $84.65, both nearly 5% above the agency's prior estimates, with Middle East output shut-ins rising to 6.7 million barrels per day in August.
EIA lifts price outlook as inventories shrink
The U.S. Energy Information Administration raised its oil price forecasts for this year and next year on Wednesday, as global stockpiles fall rapidly under pressure from the loss of Middle Eastern supply in the ongoing Iran war. Sharply higher oil and fuel prices have been the most visible sign of the toll on global energy markets from more than six months of the conflict, in which Tehran has choked oil flows through the Strait of Hormuz and bombed neighboring energy infrastructure in response to U.S. attacks.
Global oil inventories have fallen by about 400 million barrels so far this year and are set to drop further through year end, the EIA said in its Short-Term Energy Outlook, as significant Middle Eastern output and export volumes stay offline through the fourth quarter.
Brent and WTI forecasts revised higher
The agency now expects global benchmark Brent crude oil prices to average about $91 a barrel this year, a nearly 5% increase from its prior forecast. U.S. West Texas Intermediate is now expected to average $84.65 a barrel this year, also a nearly 5% hike from the EIA's prior estimate.
Meanwhile, the EIA expects Middle East oil flows to rise in the coming months as Strait of Hormuz shipments gradually increase and exporters lean on workarounds like ship-to-ship transfers. However, it cautioned that both Hormuz flows and the workarounds remain beholden to how the conflict develops.
Shut-ins climb as attacks widen
The EIA's report was finalized on September 3, before the latest escalation. Since the weekend, the U.S. and Iran have traded attacks on shipping and energy infrastructure, pushing Brent above $100 a barrel on Wednesday.
Middle East oil output shut-ins rose to 6.7 million barrels per day in August, from 5 million bpd in July, the EIA said. Attacks on Saudi Arabia's oil exports through the Bab el-Mandeb and a resulting slump in ship departures from the Yanbu port on the Red Sea contributed to the increase. Middle East shut-ins will average about 5.7 million bpd in the fourth quarter, the agency added, with regional output and exports not expected to return to pre-conflict levels until the second quarter of next year.
Source: Commodities & Futures News
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