The U.S. Energy Information Administration has raised its crude oil price projections for 2026 and 2027, now forecasting Brent crude and WTI crude averages of $91.01 and $84.65 per barrel respectively for this year. The agency anticipates that Middle Eastern oil production and trade flows will not broadly return to pre-conflict averages until the second quarter of 2027 at the earliest. All four annual price forecasts were adjusted higher.

In its Short-Term Energy Outlook released on September 9, the EIA lifted its 2026 Brent spot price average forecast from $86.81 to $91.01 per barrel, reflecting an increase of approximately 4.8%. The WTI spot price average was revised upward from $80.88 to $84.65 per barrel, a gain of about 4.7%. For 2027, the Brent average forecast was raised from $69.39 to $73.74 per barrel, up roughly 6.3%, while the WTI average was increased from $65.39 to $69.74 per barrel, an advance of about 6.7%. The EIA still expects 2027 prices to remain below 2026 levels. Under its baseline scenario, as Middle Eastern exports gradually rise, idled capacity comes back online, and global inventories are replenished, Brent crude averages are projected to decline from $91.01 in 2026 to $73.74 in 2027.

Middle Eastern production outages climbed to 6.7 million barrels per day in August. The EIA estimates that regional crude output disruptions averaged 6.7 million barrels daily in August, up from 5.0 million barrels per day in July. Restricted transit through the Strait of Hormuz and the Bab el-Mandeb Strait has made it difficult for several producers to ship crude out of the region. Saudi Arabia's oil exports via the Red Sea port of Yanbu fell by roughly half in August compared to July. The kingdom subsequently increased shipments through the Suez Canal, but that route is longer and carries higher transportation costs for Asian buyers. The EIA assumes Middle Eastern transport constraints will persist through the fourth quarter of 2026, with regional outages projected to average 5.7 million barrels per day during that period. Alternative methods such as pipelines, road transport, and ship-to-ship transfers will help exports recover gradually, but they will not fully compensate for the disruption to major sea lanes in the near term.

Most production and trade flows are unlikely to recover fully until the second quarter of next year. The EIA expects that, if its transportation and supply assumptions hold, the majority of Middle Eastern oil production and trading activity will not return to pre-conflict averages until the second quarter of 2027. Some Persian Gulf producers may remain unable to fully restore their original output levels throughout the entire forecast period. As exports increase and idled capacity is restarted, the EIA projects Brent crude prices will fall to $77 per barrel by the second quarter of 2027. With most offline capacity expected to be brought back during the second half of 2027 and global inventories set to rebuild, Brent prices could average as low as $67 per barrel in the latter half of that year. These projections represent baseline assumptions. The EIA notes that flows through the Strait of Hormuz and alternative routes will continue to fluctuate with conflict developments, meaning actual short-term price volatility may exceed what the model indicates.

Inventory drawdowns are providing support to prices this year. The EIA estimates that global oil inventories have declined by approximately 400 million barrels since the start of 2026. Stockpiles fell by an average of 3.9 million barrels per day in the second quarter, with further reductions of 3.0 million and 1.7 million barrels per day expected in the third and fourth quarters respectively. The ongoing depletion of inventories makes the crude market more sensitive to unexpected supply disruptions. The EIA forecasts that Brent spot prices will average around $90 per barrel in the second half of 2026, $8 higher than last month's projection. On September 9, Brent crude settled at $101.21 per barrel, while WTI traded at $96.05. These levels were already above the EIA's annual average forecasts. The model inputs for this report were finalized on September 3, so recent tanker attacks and Brent's renewed push above $100 were not specifically incorporated. If subsequent conflicts further impact production facilities or transit routes, the next monthly outlook could entail revised supply and price assumptions in October.