The US Energy Information Administration (EIA) revised down its 2026 crude oil price forecast, citing expectations of higher oil supply following the US-Iran agreement to end the conflict and reopen the Strait of Hormuz, according to its July Short-Term Energy Outlook (STEO) released late Tuesday.
The agency said most crude oil production is expected to return to near pre-conflict levels by the end of 2026, while the majority of shut-in output is forecast to come back online in the first quarter of 2027. Higher oil production and the resumption of trade flows are expected to reduce inventory draws in the coming months.
Global oil inventories are now forecast to decline by 2.2 million barrels per day (bpd) in the third quarter of 2026, compared with more than 7 million bpd in the June outlook. As oil production continues to increase, the market is expected to return to a pre-conflict oversupply in 2027.
Expectations of rising oil supply and slower inventory draws are expected to keep downward pressure on prices. Brent crude is forecast to average $74 per barrel in the third quarter of 2026, down $27 from last month's outlook, before declining to an average of $65 per barrel in 2027 as inventories continue to build.
The agency forecasts Brent crude to average $81.91 per barrel and US West Texas Intermediate (WTI) crude to average $76.26 per barrel in 2026, compared with $95.39 and $88.32, respectively, in the previous month's report.
- US crude output revised higher
US crude oil production is forecast to average 13.78 million bpd in 2026, up from 13.59 million bpd last year and around 60,000 bpd higher than projected in the previous month's outlook.
The agency also forecasts global oil production to average 101.89 million bpd in 2026, while global oil demand is expected to average 102.78 million bpd.
By Firdevs Yuksel
Anadolu Agency
energy@aa.com.tr
