US Energy Agency Hikes Crude Price Forecast, Oil Flow Falls 77%
US Energy Information Administration (EIA) raised its oil price forecast for the third quarter, expecting severe disruptions to oil shipments through the Strait of Hormuz to continue throughout August.
Brent crude is forecast to average $86.81 per barrel this year, up from the previous forecast of $81.91, according to the EIA’s August 2026 Short-Term Energy Outlook.
The agency expects West Texas Intermediate (WTI) crude to average $80.88 per barrel, compared with its previous forecast of $76.26. The EIA expects Brent to average $69.39 per barrel and WTI to average $65.39 next year.
Brent crude fell as low as $69 per barrel on July 2 after the US and Iran signed a memorandum of understanding in June, though prices hit $105 per barrel on July 23 amid renewed attacks on tankers in the Strait of Hormuz and lower oil shipments.
EIA data showed that oil flows through the strait fell by more than 77% to 4.9 million bpd in the second quarter of this year, from 21.6 million bpd in the fourth quarter of last year.
The outlook was also affected by a new threat to block Saudi oil exports through the Bab el-Mandeb Strait, another key route for global oil trade.
While Saudi Arabia can reroute shipments through the Suez Canal and the Suez-Mediterranean (SUMED) pipeline, the alternatives are longer, more costly and have limited capacity.
The EIA said ongoing disruptions in the Strait of Hormuz have driven down global oil inventories, keeping prices elevated until flows normalize.
Global inventories are estimated to have fallen by 4.2 million bpd in the second quarter and are expected to decline by 3.8 million bpd in the third quarter.
Brent is forecast to average $85 per barrel in the third quarter, $11 higher than the previous forecast, before falling to $78 in the fourth quarter as tanker traffic and production recover.
Prices are expected to decline further to $69 per barrel in 2027 as idled production returns and inventories rebuild.
On the demand side, global oil consumption is forecast to total 102.7 million bpd, a 1.2 million bpd drop from last year.
About 800,000 bpd of the decline is expected to come from non-OECD countries, where oil consumption is forecast to decrease to 57.2 million bpd this year, down from 58.1 million bpd.
Global oil demand is projected to rebound next year, rising by about 2.2 million bpd to 105 million bpd, around 1 million bpd above the 2025 average.
US crude oil production is expected to average 13.8 million bpd this year, up from the previous forecast of 13.78 million bpd.
For next year, production is projected to average 14.15 million bpd, compared with the previous forecast of 14.03 million bpd.
Global oil supply is forecast to average 100.82 million bpd this year, while global consumption is expected to reach 102.73 million bpd.
Next year, global supply is projected to average 109.74 million bpd, while consumption is expected to reach 104.96 million bpd. #US Energy Agency Hikes Crude Price Forecast, Oil Flow Falls 77%# EIA Upgrades Brent Price Projection for 2025
