EIA raises 2026 Brent forecast to $91 amid surging Middle East shut-ins

The U.S. Energy Information Administration now expects Brent crude to average $91.01 per barrel in 2026, up $22 from last year's average of $69.04, as escalating Middle East disruptions choke off crude flows through two of the world's most critical shipping routes.rigzone

The revised forecast, published in the EIA's September short-term energy outlook, reflects a sharp deterioration in oil supply conditions. Crude oil production shut-ins averaged 6.7 million barrels per day in August, up from 5.0 million bpd in July, driven by constrained flows through the Strait of Hormuz and the Bab el-Mandeb strait.focusmalaysia+1

Conflict Reshapes Global Oil Flows

The EIA attributed the tightening to a renewed U.S. blockade on Iran's oil exports following Iranian attacks on tankers in the Strait of Hormuz, fresh sanctions from the Treasury Department, and Houthi attacks on Saudi Arabia's Red Sea export routes. Exports from Saudi Arabia's Yanbu port on the Red Sea fell by roughly half between July and August, according to Vortexa data cited by the EIA.rigzone

Brent crude climbed back above $100 a barrel last week after Houthi strikes hit a key Saudi pipeline and Iran launched attacks on shipping, according to Reuters. On Monday, prices rose a further 3% to their highest level since May. The EIA noted that global oil inventories fell by an average of 3.9 million bpd in the second quarter and expects further drawdowns of 3.0 million bpd in the third quarter and 1.7 million bpd in the fourth quarter.reuters+1

Recovery Not Expected Until Mid-2027

The agency said it does not expect most production and trade flows to return to pre-conflict averages until the second quarter of 2027. S&P Global Energy ↗ 1.91% struck a similar tone, warning that oil markets are "settling into a new normal" and projecting Middle Eastern crude exports to average roughly 10 million to 16 million bpd through 2027, compared with about 20 million bpd before the war began in late February.rigzone

Wood Mackenzie forecast that dated Brent could rise near $110 per barrel around the end of 2026 before declining once Strait of Hormuz flows fully resume. The consultancy estimated the conflict will reduce global crude runs by 1.4 million bpd in the fourth quarter, with Asian oil demand expected to fall by 1.24 million bpd for the full year.greenbuildingafrica+1

Asian Refiners Scramble for Supply

In Asia, the disruption has sent physical crude premiums surging. South Korea's SK Energy bought 4 million barrels of U.S. WTI crude last week at premiums of about $24 a barrel to November ICE Brent swaps, while Chinese independent refiners have been scouring for alternatives as Iranian and Russian supplies dwindle, according to Reuters.reuters

"The market is not returning to calm, it is adjusting to the new normal defined by unresolved conflict and persistent maritime risk," said Jim Burkhard, vice president and global head of crude oil research at S&P Global Energy.rigzone