EIA Lifts 2026 Brent Forecast to $98 as Iran War Tightens Oil Supplies
The agency sees Brent averaging $105 a barrel in the fourth quarter and $98 for 2026, with diesel above $6 a gallon in October.
Tariq Benali Tariq Benali covers business and corporate news across the UAE and MENA for Anecdoted, tracking the deals, leadership moves and regulatory shifts behind the region's companies. tariq@anecdoted.com
The US Energy Information Administration has lifted its crude price outlook for this year and next, pointing to shrinking global stockpiles, a strained diesel market and shipping disruptions tied to the war with Iran.
Brent forecast climbs
The agency puts the fourth-quarter Brent average at $105 per barrel, $14 above its previous projection. For 2026 as a whole, Brent is expected to average $98 per barrel, an 8% increase over last month's number, according to the short-term energy outlook published Tuesday.
Tight crude and refined product markets sit behind the revision. Inventories are drawing down, diesel supply is unusually thin, and refiners chasing maximum diesel output are pulling more crude into a market already short of fuel.
US retail diesel set records last month. The EIA expects it to stay above $6 per gallon during October, then drift lower toward an average of about $4.5 per gallon in 2027.
The 2027 Brent forecast was also raised, to $84 per barrel, $10 more than the prior estimate. Conditions should ease as Middle East output and exports come back, transit through the Strait of Hormuz improves, and exporters lean harder on alternate routes and ship-to-ship transfers.
Saudi pipeline risk
Strikes on Saudi Arabia's East-West Pipeline, an important export artery for a top producer, show how further damage to physical flows could lift prices, the agency said.
Crude has climbed steeply since the US-Israeli campaign against Iran began, cutting into flows through the Strait of Hormuz, which handled roughly a fifth of world oil supply before the conflict. Prices slipped 2% on Tuesday but stayed more than 37% above their February 28 level, the day the war started. Iran has struck energy infrastructure elsewhere in the region as well, adding strain on production.
"Although we assume that oil flows from the Middle East will remain constrained through the fourth quarter of 2026, we estimate that regional shut-in production in September was the lowest since the onset of hostilities," the EIA said.
Saudi Arabia has resumed East-West Pipeline shipments after Houthi attacks, and regional exporters have worked around strikes on shipping and energy assets using dark transits, in which tankers switch off tracking systems before handing off cargo at sea. Those tactics helped Gulf flows outside Iran climb back above 81% of pre-war levels in September.
As such measures spread, shut-in crude is projected to fall from 4.5 million barrels per day in the fourth quarter of 2026 to 2.7 million bpd in the first quarter of 2027. Better supply should eventually pull prices down, with Brent averaging $84 per barrel next year as Middle East flows recover and inventories rebuild.
US output and demand
Higher global prices should also draw more US crude. The EIA sees domestic production hitting a record 14.3 million bpd in 2027, after a record 13.9 million bpd in 2026. US petroleum demand is expected to ease to 20.6 million bpd in 2026, then rebound to 20.8 million bpd in 2027.
