EIA Slashes Oil Forecasts as Persian Gulf Exports Resume

The agency’s latest Short Term Energy Outlook projects a return to pre-conflict trade patterns by year-end, with the bulk of previously shut-in production coming back online by the first quarter of 2027. This supply influx has prompted a sharp downward revision in price expectations. For 2026, Brent crude is now forecast at $82 a barrel, down from the prior $95 estimate, while West Texas Intermediate is pegged at $76 compared to the earlier $88 projection. The outlook for 2027 is even more subdued, with Brent averaging $65 and WTI $61.

Despite the bearish outlook, the EIA notes that restocking efforts will act as a buffer against a sharper price collapse. Global inventory levels are expected to shift from a draw of 2.2 million barrels per day in the third quarter of 2026 to a surplus of 5 million barrels per day by 2027. Officials attribute the current inventory draw to the clearing of stranded tankers, but warn that rising production will inevitably return the market to a state of oversupply.