The U.S. Energy Information Administration (EIA) projects that the average spot price of Brent crude will be $91 per barrel in 2026 and $74 per barrel in 2027, representing upward revisions of $4 and $5, respectively, from previous forecasts. The average Brent price in the second half of 2026 is expected to be approximately $90 per barrel, $8 higher than previously projected. The EIA anticipates an average production disruption of about 5.7 million barrels per day in the fourth quarter, with global inventories continuing to decline.
On September 9, the U.S. Energy Information Administration (EIA) released its latest Short-Term Energy Outlook (STEO), significantly raising its Brent crude oil price forecasts for the next two years.
The EIA projects that the average spot price of Brent crude will be $91 per barrel in 2026 and $74 per barrel in 2027, representing upward revisions of $4 and $5, respectively, from previous forecasts. Meanwhile, the EIA expects the average Brent price to reach approximately $90 per barrel in the second half of this year, an $8 increase from its August forecast.
The primary driver of this adjustment is the expectation that disruptions to Middle Eastern oil supplies will persist longer than previously anticipated.
The EIA anticipates that some Middle Eastern oil production capacity will remain offline in the coming months due to transportation constraints in the Strait of Hormuz and the Bab el-Mandeb Strait. In August, average production cuts in the Middle East reached 6.7 million barrels per day (bpd), up from 5.0 million bpd in July; the EIA expects average outages to remain at approximately 5.7 million bpd in the fourth quarter.
Meanwhile, global oil inventories are declining rapidly. The EIA estimates that global oil stocks have decreased by approximately 400 million barrels since the beginning of the year and are expected to continue falling through the remainder of 2026. Given that supply recovery will take time, the EIA projects that Brent prices will remain near $90 per barrel in the second half of this year.
On Wednesday, Brent crude rose more than 3%, briefly surpassing $100 per barrel to trade above $101, marking the first time since July.
The restoration of Middle Eastern supplies remains key to any decline in oil prices.
The EIA's baseline scenario does not assume that oil prices will remain elevated over the long term. The agency expects Brent prices to gradually ease in 2027 as Middle Eastern oil exports resume, shut-in capacity comes back online, and global inventories rebuild. The average price for 2027 is projected at $74 per barrel, further declining to approximately $67 per barrel in the second half of the year.
However, the EIA also noted significant uncertainty regarding oil flows through the Strait of Hormuz and alternative transport routes, implying that actual price movements could be more volatile than the baseline forecast suggests.
Notably, the input data for the EIA's forecasting model this month was cut off on September 3 and did not incorporate subsequent market developments. This suggests that the EIA's current full-year forecast of $91 may still be below the short-term risk premium currently priced into the market.
According to Reuters, oil shipments through the Strait of Hormuz have fallen from approximately 8–9 million barrels per day before the conflict to less than 2 million barrels per day, further intensifying market concerns over the duration of supply disruptions.
Oil prices surpass $100, reigniting inflation risks
Rising oil prices are once again becoming a critical variable for global inflation and monetary policy. Analysts note that if Brent crude remains above $100 per barrel, higher energy costs could further transmit to transportation, manufacturing, and household consumption, thereby increasing inflationary pressures and compelling major central banks to maintain elevated interest rates for a longer period.
Meanwhile, the buffer capacity in the global oil market is narrowing. The U.S. Strategic Petroleum Reserve currently stands at only about 290 million barrels, near its lowest level since 1982, while months of supply disruptions in the Middle East have led to declining inventories in some major consuming countries.
Therefore, the core signal conveyed by the EIA’s upward revision is not that “oil prices will remain above $100 for an extended period,” but rather that supply shocks in the Middle East are forcing the market to reassess the central tendency of oil prices over the next one to two years.
If transportation through the Strait of Hormuz resumes and idled production capacity is gradually restarted as projected by the EIA, oil prices may still decline by 2027; however, if supply disruptions expand further, there remains a risk that the current forecasts of $91 and $74 will be revised upward again.
Editor/Stephen