The U.S. Power Info Administration (EIA) elevated its 2026 Brent oil worth projection in its newest brief time period vitality outlook (STEO), which was revealed on April 7.
In its April STEO, the EIA forecast that the Brent spot worth will common $96.00 per barrel this yr. The EIA’s earlier STEO, which was revealed in March, noticed the Brent spot worth averaging $78.84 per barrel in 2026.
A quarterly breakdown included within the EIA’s newest STEO projected that the Brent spot worth will are available at $114.60 per barrel within the second quarter of this yr, $99.80 per barrel within the third quarter, and $88.00 per barrel within the fourth quarter. In its March STEO, the EIA projected that the commodity would common $90.56 per barrel within the second quarter, $75.45 per barrel within the third quarter, and $70.00 per barrel within the fourth quarter.
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The EIA’s April STEO sees the Brent spot worth averaging $76.09 per barrel in 2027. In its earlier STEO, the EIA projected that the Brent spot worth would common $64.47 per barrel subsequent yr.
The forecast for the EIA’s newest STEO was accomplished earlier than the announcement of what Naeem Aslam, CIO at Zaye Capital Markets, described as a “two-week Strait of Hormuz ceasefire”. Aslam highlighted, in an announcement despatched to Rigzone on April 8, that WTI and Brent have been down 13-15 % intraday “as … [the] ceasefire triggers a fast unwind of geopolitical threat premium following the $110+ spike”.
The EIA acknowledged in its April STEO that international oil markets “are in a interval of heightened volatility and uncertainty as a result of de facto closure of the Strait of Hormuz, a significant world oil transit chokepoint via which almost 20 % of world oil provide flows”.
“The strait has been successfully closed to delivery site visitors since navy motion started on February 28. The Brent crude oil spot worth averaged $103 per barrel in March, $32 per barrel larger than the common in February, and every day Brent crude oil costs reached nearly $128 per barrel on April 2,” the EIA highlighted.
“The closure of the strait has dramatically diminished the supply of oil provides to international markets and has had cascading results throughout oil provide chains,” it warned.
In its newest STEO, the EIA famous that, previous to the U.S.-Iran battle, its evaluation was that the worldwide oil market was oversupplied and that international oil inventories have been constructing rapidly, which the EIA stated was mirrored in steadily falling oil costs over the earlier yr.
“We anticipated this development to proceed over the following two years, as sturdy progress in manufacturing from each non-OPEC+ producers and elevated manufacturing targets from OPEC+ international locations outpaced progress in international oil demand,” the EIA stated within the STEO.
“Nonetheless, the battle in Iran has rapidly shifted market dynamics, as producers within the area have been pressured to close in important volumes of oil manufacturing, resulting in near-term tightness out there,” it added.
The EIA highlighted in its STEO that, beforehand, it assumed there can be a one month disruption to grease flows and ensuing shut-in of oil manufacturing of about 5.5 million barrels per day, peaking in March.
“We anticipated the well-supplied market on the onset of the battle would hold oil costs from exceeding $100 per barrel on a month-to-month common foundation if the battle was resolved rapidly,” the EIA added.
“Nonetheless, because the battle and the closure of the Strait of Hormuz have persevered past our preliminary assumptions, we notice that international oil inventories have drawn down sharply and shut-in oil manufacturing volumes have elevated, elevating our oil worth forecast for the approaching months,” it continued.
“As well as, we anticipate that disruptions will proceed via late 2026, placing upward stress on costs over that interval,” it famous.
“Additional, escalating assaults on vitality infrastructure across the area and uncertainty in regards to the final period of the battle and the efficient closure of the Strait of Hormuz lead us to evaluate that oil costs will replicate a bigger threat premium all through the forecast,” the EIA went on to warn.
The EIA acknowledged in its April STEO that, as soon as flows via the Strait of Hormuz resume, it assumes it “will take time to resolve the backlog and disruption to grease tanker routes and commerce flows and that the potential for future disruptions will stay in danger and create a premium within the oil worth”.
“We now anticipate that Brent crude oil costs will improve from a mean of $81 per barrel in 1Q26 to a peak of $115 per barrel in 2Q26 earlier than regularly falling to a mean of $88 per barrel in 4Q26,” the EIA highlighted.
“We base this on the belief that the battle doesn’t persist previous April and that site visitors via the Strait of Hormuz regularly resumes however doesn’t return to pre-conflict ranges till late 2026,” it added.
“Shut-in oil manufacturing regularly returns as flows via the strait resume and oil commerce flows alter. Given this comparatively lengthy adjustment interval after flows via the strait resume, we anticipate oil costs will stay elevated, with Brent crude oil costs averaging $76 per barrel in 2027, about $23 per barrel larger than in our February STEO forecast,” it stated.
The EIA famous in its newest STEO that disrupted crude oil manufacturing volumes within the Center East have “elevated considerably” since its final forecast in March.
“We assess that manufacturing shut-ins averaged 7.5 million barrels per day in March, and we anticipate they’ll improve to a peak of 9.1 million barrels per day in April earlier than regularly falling over the approaching months,” the EIA stated.
“These disruptions indicate a worldwide stock draw of 5.1 million barrels per day in 2Q26,” it added.
The EIA identified in its STEO that its forecast consists of the U.S. Strategic Petroleum Reserve (SPR) launch introduced on March 11 and the collective launch of strategic shares introduced by the Worldwide Power Company (IEA).
In its April STEO, the EIA stated it has additionally revised its assumptions for international oil demand, “based mostly on reviews of presidency initiatives to scale back gas use, gas shortages, and the curbing of refined oil product exports”.
“We assume reductions in demand happen primarily in Asia, which is extra reliant on crude oil provides from the Center East,” the EIA acknowledged.
“Because of this, we now assume that international oil demand progress will common 0.6 million barrels per day in 2026, down from a mean of 1.2 million barrels per day in final month’s STEO,” it added.
“We assume oil demand will rebound subsequent yr as soon as provide flows return later in 2026, with oil demand rising by 1.6 million barrels per day in 2027 to 106.2 million barrels per day,” it continued.
To contact the writer, e mail andreas.exarheas@rigzone.com
