The U.S. Vitality Data Administration (EIA) elevated its Brent spot worth forecast for 2026 and 2027 in its newest brief time period vitality outlook (STEO), which was launched on March 10.
On this STEO, the EIA projected that the Brent spot worth will common $78.84 per barrel this yr and $64.67 per barrel subsequent yr. The EIA projected in its earlier STEO, which was launched in February, that the Brent spot worth would common $57.69 per barrel in 2026 and $53.00 per barrel in 2027. Each STEOs spotlight that the Brent spot worth averaged $69.04 per barrel in 2025.
A quarterly breakdown included within the EIA’s newest STEO confirmed that the EIA expects the Brent spot worth to come back in at $79.62 per barrel within the first quarter of this yr, $90.56 per barrel within the second quarter, $75.45 per barrel within the third quarter, $70.00 per barrel within the fourth quarter, $66.00 per barrel within the first quarter of subsequent yr, $65.00 per barrel within the second quarter, $64.00 per barrel within the third quarter, and $63.00 per barrel within the fourth quarter.
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In its earlier STEO, the EIA projected that the Brent spot worth would common at $64.44 per barrel within the first quarter of 2026, $57.32 per barrel within the second quarter, $55.35 per barrel within the third quarter, $54.00 per barrel within the fourth quarter, and $53.00 per barrel throughout all 4 quarters of 2027.
“The Brent crude oil spot worth rose from a median of $71 per barrel on February 27 to $104 per barrel on March 9 following the onset of army motion within the Center East that started on February 28,” the EIA acknowledged in its March STEO.
“As of March 9, after we finalized our forecast, bodily harm to grease infrastructure was restricted, however the Strait of Hormuz was successfully closed to most transport visitors,” it added.
The EIA warned in its STEO that “excessive uncertainty concerning the battle’s impact on oil provides has added a big danger premium to grease costs as market members assess precise disruptions to grease flows and weigh the potential for these disruptions to persist”.
The first danger that might trigger oil costs to proceed rising is an prolonged closure of the Strait of Hormuz, the EIA mentioned, noting that this route is a serious world oil transit chokepoint by way of which practically 20 p.c of worldwide oil provide flows.
“Though the Strait of Hormuz will not be bodily blocked, the specter of assault by Iran and the cancellation of insurance coverage protection have led most tankers to keep away from transiting the Strait,” the EIA famous in its STEO.
“In consequence, some oil manufacturing within the area has been shut in. If this discount in vessel quantity persists, oil storage behind the chokepoint will shortly fill, inflicting oil producers to close in much more manufacturing, lending additional assist to grease costs,” it added.
In its March STEO, the EIA highlighted that working its mannequin requires making a variety of assumptions about an surroundings that’s evolving and unsure.
“On this evaluation, we make the belief that shut-in oil manufacturing will peak in early April, largely in Iraq with smaller volumes in Kuwait, the United Arab Emirates, and Saudi Arabia,” it identified.
“We make the additional assumption that shut-in manufacturing will steadily ease as transit by way of the Strait resumes. We count on some near-term disruptions of oil flows and associated manufacturing shut-ins, together with a persistent danger premium, will preserve Brent costs at a median of $91 per barrel within the second quarter of 2026,” it added.
“As soon as oil flows are reestablished by way of the Strait of Hormuz, we count on world oil manufacturing will proceed to outpace consumption over our forecast interval, leading to world oil inventories growing by a median of 1.9 million barrels per day in 2026 and by 3.0 million barrels per day in 2027,” it continued.
The EIA warned that rising oil inventories will once more start to weigh on oil costs and highlighted that it expects the Brent worth will fall to a median of $70 per barrel within the fourth quarter of 2026 and to $64 per barrel in 2027.
In its March STEO, the EIA additionally identified that, on March 1, OPEC+ agreed to start growing manufacturing in April 2026 by a complete of 206,000 barrels per day.
“Though OPEC+ won’t announce its deliberate 2027 targets till 4Q26, we don’t count on OPEC+ will considerably improve manufacturing subsequent yr given estimates of serious stock builds over the forecast interval,” the EIA projected.
“Our present assumption round OPEC+ provide is also contingent on the length and extent of disruption to grease flows across the Strait of Hormuz,” it added.
The escalating struggle between the U.S., Israel, and Iran is creating probably the most extreme disruption to world vitality markets for the reason that Seventies, GlobalData mentioned in a press release despatched to Rigzone on Wednesday.
To contact the writer, electronic mail andreas.exarheas@rigzone.com
