EIA Hikes 2026 Oil Forecast to $96 on Hormuz Closure

The EIA's Short-Term Energy Outlook (STEO) also revised West Texas Intermediate (WTI) crude to $87.41 per barrel from $73.61. Brent spot prices averaged $103 per barrel in March, surging to nearly $128 on April 2, driven by the effective closure of the Strait of Hormuz, a critical chokepoint for 20% of global oil supply.

Production outages in the Middle East reached 7.5 million barrels per day (bpd) in March, peaking at 9.1 million bpd in April, leading to a projected global inventory draw of 5.1 million bpd in the second quarter of 2026. Global oil demand expectations are revised lower due to government efforts to curb consumption, supply shortages, and restrictions on refined product exports, particularly impacting Asia.

Disruptions are expected to persist through 2026, maintaining upward price pressure. President Trump announced a two-week ceasefire contingent on Iran reopening the Strait, but the EIA assumes lingering disruptions to tanker traffic and trade routes will keep prices elevated even if flows resume, with renewed outage risks.

US crude oil production is forecast to average 13.51 million bpd in 2026, rising to 13.95 million bpd in 2027.