EIA Raises 2026, 2027 Oil Price Forecasts Yet Again
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The U.S. Energy Information Administration (EIA) raised its 2026 and 2027 Brent oil spot price forecasts yet again in its latest short term energy outlook (STEO), which was released recently.
According to this STEO, the EIA now sees the commodity averaging $97.44 per barrel this year and $85.78 per barrel next year. In its previous STEO, which was released in October, the EIA projected that the Brent oil spot price would average $96.32 per barrel in 2026 and $83.74 per barrel in 2027, in its September STEO, the EIA saw the commodity coming in at $91.01 per barrel in 2026 and $73.74 per barrel in 2027, in its August STEO, the EIA projected that the commodity would average $86.81 per barrel this year and $69.39 per barrel next year, and in its July STEO the EIA saw the commodity averaging $81.91 per barrel in 2026 and $64.76 per barrel in 2027.
A quarterly breakdown included in the EIA’s latest STEO revealed that the EIA sees the Brent spot price coming in at $109.13 per barrel in the fourth quarter of this year, $94.90 per barrel in the first quarter of 2027, $89.00 per barrel in the second quarter, $83.03 per barrel in the third quarter, and $76.94 per barrel in the fourth quarter. The commodity averaged $81.11 per barrel in the first quarter of this year, $102.93 per barrel in the second quarter of this year, $95.95 per barrel in the third quarter, and $69.04 per barrel overall in 2025, the EIA’s November STEO showed.
“The Brent crude oil spot price increased to an average of $124 per barrel in October, $10 per barrel higher than in September and the highest price since July 2022 when prices averaged $127 per barrel, adjusted for inflation,” the EIA highlighted in its latest STEO.
“Prices increased for a third consecutive month as global oil inventories continued to fall. Attacks on oil tankers continued around the Middle East and, more recently, in the Black Sea, stemming from the conflict between Russia and Ukraine,” it added.
“These attacks further disrupted global oil flows and reduced the availability of global oil tankers, causing tanker rates to rise sharply,” it continued.
In its November STEO, the EIA highlighted that, “although oil prices increased last month, ship tracking data from Vortexa indicate that oil exports from the Middle East increased slightly in October, following the restart of the Saudi Arabian East-West Pipeline”.
Advertisement - Scroll to continue“Continued flows through the Strait of Hormuz using ship-to-ship transfers along Oman’s coast added to supply, which was reflected in prices during late October and early November, with the Brent spot price falling below $100 per barrel on November 4,” it added.
Production Shut-Ins, Inventories, Consumption
Crude oil production shut-ins fell in October compared with September, the EIA said in its STEO, noting that it assesses that crude oil production shut-ins in the Middle East averaged 2.5 million barrels per day in October, “down from 10.9 million barrels per day at the peak in May”.
“Shut-in volumes in our forecast remain essentially flat through the remainder of 2026, as we assume oil flows from the Middle East remain somewhat constrained during this period,” the EIA pointed out.
“Amid ongoing constraints, we forecast Brent will average around $100 per barrel during November and December,” it said.
The EIA estimated in its latest STEO that global oil inventories fell by an average of 1.2 million barrels per day in the third quarter of 2026 but projected that they will begin building in the fourth quarter.
“Although we forecast that global oil production will outpace consumption in the fourth quarter of 2026, the heightened risk of supply disruptions and longer shipping routes will limit the near-term impact of global stock builds until geopolitical risk dissipates and inventories begin to return closer to pre-conflict levels,” the EIA highlighted.
“We assume export workarounds from the Middle East such as pipeline and overland bypass routes, ship-to-ship transfers, and new pipeline capacity expected to come online in 2027 in the United Arab Emirates will lead to shut-in volumes gradually falling through the Short-Term Energy Outlook forecast period,” it added.
“Global inventories in our forecast build by 3.5 million barrels per day in the first half of 2027, pushing the Brent price below $90 per barrel in 2Q27,” it continued.
The EIA revealed in its STEO that it expects the majority of production in the Middle East, outside of Iran, to return to pre-conflict averages by the end of the second quarter of 2027.
“We expect exports from Iran, however, to remain constrained through the forecast period,” the EIA said.
“As depleted global oil inventories build throughout next year, oil prices gradually fall to an average of $77 per barrel in the fourth quarter of 2027,” it added.
“However, we expect crude oil flows from the Middle East - via both the Strait of Hormuz and alternative routes - will remain susceptible to disruption, resulting in more volatility in short-term price movements than our monthly forecast indicates,” it warned.
The EIA also highlighted in its November STEO that oil demand “has fallen considerably during the prolonged oil supply disruption”.
“The reduction in oil consumption, particularly in China, has limited the impact that the loss of supply has had on global oil prices,” the EIA said.
“We now estimate that global liquid fuels consumption will fall by 2.0 million barrels per day in 2026,” it added.
“In addition to lower consumption in China, we estimate oil consumption in the Middle East has fallen largely because of reduced air travel and less economic activity,” it continued.
“We anticipate that global oil demand will recover in 2027, increasing by 2.0 million barrels per day on average, as the gradual increase in oil flows and falling prices encourage increased demand,” it went on to state.
Forecasts Revised Up
In a BMI report sent to Rigzone by the Fitch Group on October 23, BMI analysts revealed that they had revised up several of their oil, natural gas, and refined fuel price forecasts for 2026 and 2027 following an update from BMI’s Country Risk team, which they pointed out identified the first quarter of 2027 as the most likely period for a preliminary U.S.-Iran agreement to reopen the Strait of Hormuz.
“The revised scenario extends the disruption to Middle Eastern energy trade into the Northern Hemisphere winter, when natural gas markets are particularly exposed to supply disruption,” the BMI analysts warned in the report.
“Although oil and gas prices should ease once an agreement supports a recovery in commercial shipping, the timing and speed of normalization will vary significantly across commodities,” they said.
“LNG and refined fuels will take longer to recover than crude due to damage to processing infrastructure, low inventories and persistent constraints on shipping, insurance and refinery operations,” they added.
Looking at Brent, the BMI analysts highlighted in the report that, in October, they raised our Brent futures forecast to an average of $93 per barrel in 2026 and $81 per barrel in 2027. The analysts pointed out that this was up from $83 per barrel and $71 per barrel previously.
“We expect Brent to average $107 per barrel in the fourth quarter of 2026 and $112 per barrel in the first quarter of 2027, as repeated cycles of U.S.-Iran escalation and de-escalation coincide with dwindling market buffers,” the analysts said in the report.
“However, once a preliminary deal to reopen the Strait of Hormuz is reached in the first quarter, Brent should sell off steeply as market conditions normalize and war-related risks abate,” they added.
“A surge in both OPEC and non-OPEC supply growth will overwhelm demand later in the year, driving Brent down to an average of $67 per barrel in the fourth quarter of 2027,” they warned.
The analysts highlighted, however, that “risks remain substantial in both directions”.
“In the near term, the principal source of risk is the trajectory of the U.S.-Iran conflict,” they said.
“An early deal could drive prices sharply lower sooner than expected, while a return to high-intensity warfare, including attacks on critical energy infrastructure, could trigger price spikes exceeding those seen earlier in the conflict,” they added.
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MORE FROM THIS AUTHOR Andreas Exarheas
Editor | Rigzone
Figures reflect the source report and its stated period. This article is for information and is not investment advice.
