The U.S. Energy Information Administration (EIA) forecasts that the average Brent crude oil price will increase by 37 percent year-on-year in 2018, according to its Short-Term Energy Outlook report released on Wednesday.
The EIA estimated that the Brent oil price would average $74 per barrel in 2018, up from $54 per barrel in 2017. The administration's projection for Brent crude oil prices in 2019 is $75 a barrel.
The report also stated that West Texas Intermediate (WTI) crude oil would be recorded as $68 a barrel in 2018. The WTI crude oil prices averaged $51 a barrel last year, according to the administration.
“Crude oil prices rose in anticipation of potentially steep declines in Iranian crude oil production and exports as a result of the reinstitution of U.S. sanctions on November 4,” the report said.
Following the first round of the U.S. pre-nuclear deal sanctions on Iran, which were enforced in August, a second phase of U.S. sanctions banning the purchase of Iranian oil and gas is expected to come into effect in November.
The administration also stated that major oil importing countries including Japan, South Korea, China and India are preparing for ‘sharp reductions’ in crude oil imports from Iran.
Meanwhile, the EIA predicts that U.S. crude oil production will average 10.7 million barrels per day (b/d) in 2018, up from 9.4 million b/d in 2017.
The country’s average oil production is forecasted to further rise in 2019 and average 11.8 million b/d, according to the outlook report.
By İclal Turan
Anadolu Agency
energy@aa.com.tr