Crude oil prices are forecast to decline during the first half of 2020 but later increase through 2021, the U.S.' Energy Information Administration (EIA) said in a statement on Wednesday.
The EIA said the U.S.' military action in Iraq earlier this month "has increased uncertainty about potential disruptions to oil production and shipping in the Middle East," which is home to almost half of the world's proved oil reserves and one-third of global oil production.
Following the U.S.' strike that killed Qasem Soleimani, the commander of the Iranian Revolutionary Guards Corps’ Quds Force, after which Iran launched missiles against the U.S. military and coalition forces, the price of Brent crude rose to as much as $70 per barrel.
However, oil prices have subsequently fallen since then as the risk premium decreases, the EIA said, adding that it expects Brent to decline in early 2020 to average $62 per barrel in May.
"EIA does not forecast supply disruptions, and any physical supply disruptions would put upward pressure on prices," the statement said.
The administration said it forecasts that Brent will average $65 per barrel in 2020 and $68 a barrel in 2021, while American benchmark West Texas Intermediate is estimated to average $59 a barrel in 2020 and $62 per barrel in 2021.
By Ovunc Kutlu