The U.S. Energy Information Administration raised its oil price forecasts for 2026 and 2027 on Wednesday, citing rapidly falling global stockpiles due to lost Middle Eastern supply from the ongoing Iran conflict.

The agency now expects Brent crude oil to average around $91 per barrel in the spot market this year, marking a nearly 5% increase from its previous 2026 forecast. U.S. West Texas Intermediate crude prices are projected to average $84.65 per barrel this year, also up nearly 5% from the prior estimate.

The EIA finalized its forecast inputs on September 3, before the latest escalation in Middle East tensions. The U.S. and Iran have exchanged attacks on shipping and energy infrastructure in the region since last weekend, pushing Brent crude prices above $100 per barrel on Wednesday.

Global oil inventories have declined by 400 million barrels so far in 2026 and will continue falling through year-end, the EIA estimated. Middle East crude oil production shut-ins increased to 6.7 million barrels per day in August from 5 million barrels per day in July.

The agency expects Middle East oil output to rise in coming months due to gradually increasing flows through the Strait of Hormuz. Some constraints to oil exports from the region are assumed to persist through the end of 2026, with crude oil output from the Middle East remaining below pre-conflict averages until the second quarter of 2027.

Middle East oil production shut-ins are forecast to average 5.7 million barrels per day in the fourth quarter of 2026. The EIA expects renewed U.S. blockades and sanctions to restrict Iran’s oil exports and reduce its output.

U.S. distillate fuel stocks are projected to drop below 100 million barrels in September and remain below the five-year low through most of 2027. Global distillate fuel output is expected to stay below last year’s levels in coming months.

Source: Investing.com