Brent crude to stay high short term, decline sharply in H2 2026: EIA
The EIA forecasts prices will fall below $80 per barrel in the third quarter and ease further to around $70 by the end of the year.
Brent crude oil prices are expected to remain elevated above $95 per barrel over two months before declining sharply in the second half of 2026, according to the US Energy Information Administration's Short-Term Energy Outlook released on 10 March.
The EIA forecasts prices will fall below $80 per barrel in the third quarter and ease further to around $70 by the end of the year.
Prices are projected to average $64 per barrel in 2027, according to the report.
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The outlook, the EIA said, remains highly sensitive to developments in the Middle East, particularly the duration of the ongoing US-Israeli war on Iran and the extent of disruptions to oil production.
Brent crude has surged following the onset of military action in the region. The benchmark settled at $94 per barrel on 9 March, marking an about 50% increase since the start of the year and the highest level since September 2023.
The price spike has been driven by a decline in petroleum shipments through the Strait of Hormuz, a critical global oil transit route, as well as production shutdowns in parts of the Middle East.
In its baseline scenario, the EIA said it assumes that the effective closure of the Strait of Hormuz will lead to further declines in regional oil output in the coming weeks.
However, it expects the situation to gradually stabilise when transit through the strait resumes, allowing shut-in production to come back online.
Oil prices surged yesterday (2 April) after US President Donald Trump said in a televised address that Washington would strike Iran "extremely hard" in the coming weeks, dampening hopes of a quick end to the conflict.
Brent crude rose as much as 8% to $109.74 a barrel, rebounding from a drop the previous day when expectations of de-escalation briefly pushed the benchmark below $100, reports The Guardian.
US crude also climbed sharply, with West Texas Intermediate gaining 11% to $111.60 a barrel, crossing the $110 mark for the first time since 9 March.
Brent later pared gains to $106.40, still up 5% on the day, after reports that Iran and Oman are working on a "protocol" to regulate marine traffic through the vital Strait of Hormuz.
The EIA's next outlook is expected on 7 April.
