US EIA hikes oil price forecasts again as Iran war drains global stockpile
USO•The EIA raised its Brent crude forecast to about $98 a barrel in 2026 and $84 in 2027, citing falling global inventories and tight diesel markets amid the Iran war. It expects Brent to average about $105 in the fourth quarter of 2026.
1. Higher oil forecasts
The US Energy Information Administration raised its oil price forecasts for this year and next year in its Short-Term Energy Outlook. Brent crude is now expected to average about $98 a barrel in 2026, 8% above the agency’s previous forecast, and $105 in the fourth quarter, $14 above its prior estimate.
2. Diesel and supply disruptions
The EIA said falling global inventories and tightening diesel supplies are expected to keep crude prices elevated. US retail diesel prices, which hit record highs last month, are expected to remain above $6 a gallon in October before gradually easing to an average of roughly $4.50 a gallon in 2027.
3. Flows begin recovering
The EIA expects Middle East oil production and exports to gradually recover as transit through the Strait of Hormuz improves and producers use alternative routes and ship-to-ship transfers. Gulf oil flows, excluding Iran, were more than 81% of pre-war levels in September; crude production shut-ins are expected to fall from 4.5 million barrels per day in the fourth quarter of 2026 to 2.7 million in the first quarter of 2027.
