EIA raises 2026 oil price forecast as Brent tops $100

The U.S. Energy Information Administration on Wednesday raised its oil price forecasts for 2026, projecting Brent crude to average around $91 per barrel for the full year — nearly 5% higher than its previous estimate — as the ongoing conflict between the United States and Iran continues to drain global oil inventories at a historic pace.engine+1

The updated September Short-Term Energy Outlook, released on September 9, projects Brent crude to average roughly $90 per barrel in the second half of 2026 before declining to $74 per barrel in 2027 as Middle Eastern production gradually recovers. The EIA estimates that global oil inventories have fallen by 400 million barrels so far this year, with crude production shut-ins averaging 6.7 million barrels per day in August, up from 5.0 million barrels per day in July.hydrocarbonengineering+1

Conflict Keeps Markets Tight

The forecast landed just as Brent crude breached $100 per barrel on Wednesday for the first time since July, after Iran and the United States launched the largest wave of attacks on shipping since their six-month conflict began. Iran said it had attacked 10 ships near the Strait of Hormuz after the U.S. sank five Iranian oil tankers, according to Reuters. On Thursday, prices continued climbing, with both U.S. and international benchmarks trading higher.reuters+2

"The tit-for-tat attacks suggest oil flows from the Persian Gulf are likely to remain disrupted for the foreseeable future," ANZ analyst Daniel Hynes said in a client note.shafaq+1

The EIA acknowledged that its price forecast "remains highly sensitive to the projected duration of the conflict" and its impact on production. Oil flows through the Strait of Hormuz, which before the war carried roughly a fifth of global oil and gas supplies, remain far below pre-war levels.engine+1

Production Outlook

Global liquid fuels production is expected to reach 100.62 million barrels per day in 2026, about 200,000 barrels per day lower than the EIA's previous estimate. OPEC's liquid fuels production is forecast to average around 23.59 million barrels per day this year, approximately 410,000 barrels per day below prior projections.engine

The agency expects most shut-in production to be restored by early 2027, with total global liquid fuels output projected to reach 109.88 million barrels per day that year. New bypass pipeline capacity in the UAE, expected online by mid-2027, could further ease the export bottleneck.engine

Diesel and Natural Gas

The EIA also raised its diesel price outlook, forecasting U.S. retail diesel prices to average $5.07 per gallon this year, up from a prior estimate of $4.85. U.S. distillate fuel oil inventories are expected to drop below 100 million barrels in September and remain below the five-year low through much of 2027.morningstar+1

On the natural gas side, the outlook was more favorable: U.S. inventories are on track to be about 5% above the five-year average at the start of winter, supported by rising production in the Permian and Haynesville regions.hydrocarbonengineering+1