The EIA now projects a bigger oil shortfall for 2026 and a bigger surplus for 2027 than it did a month ago. The agency also raised its second-half 2026 Brent price forecast to $90 a barrel on falling global inventories, before seeing prices ease through 2027 as Middle East supply returns.
EIA widens its 2026 crunch, 2027 glut forecasts
The U.S. Energy Information Administration's September short-term energy outlook (STEO) now sees world oil consumption outpacing production by 1.97 million barrels per day in 2026, up from 1.91 million barrels per day in August's outlook. For 2027, the agency now expects production to exceed demand by 4.90 million barrels per day, wider than the 4.78 million barrel-per-day glut it forecast in August.
For 2026, the EIA now projects consumption at 102.59 million barrels per day against production of 100.62 million, versus its prior estimate of 102.73 million and 100.82 million barrels per day, respectively. For 2027, it sees demand at 104.98 million barrels per day and production at 109.88 million, up slightly from the prior 104.96 million and 109.74 million.
Crunch persists through 2026 before flipping to a growing glut
The agency's quarterly path shows the crunch narrowing before reversing. It forecasts a shortfall of 2.96 million barrels per day in the third quarter of 2026 and 1.71 million in the fourth, before the market swings to a glut of 3.01 million barrels per day in the first quarter of 2027. That surplus then widens to 5.05 million barrels per day in the second quarter, 5.23 million in the third, and 6.25 million in the fourth.
By comparison, the second quarter of 2026 saw a crunch of 3.86 million barrels per day, following a glut of 0.71 million barrels per day in the first quarter. For 2025 as a whole, the EIA said production averaged 106.24 million barrels per day against consumption of 104.28 million, a glut of 1.96 million barrels per day.
Falling inventories keep Brent near $90 through 2H26
The EIA said global oil prices rose to an average of $91 a barrel in August, $7 higher than in July, as falling global inventories kept prices elevated. It estimates inventories have dropped by 400 million barrels so far this year and expects them to keep falling through the end of 2026.
As a result, the agency now forecasts Brent crude to average around $90 a barrel in the second half of 2026, $8 higher than in last month's STEO. It attributed the elevated prices to a large drawdown in global inventories driven by continued disruptions to crude oil production, adding that prices will likely stay elevated until oil flows return to normal and inventories can be replenished.
Prices seen easing as Middle East supply returns
The EIA expects prices to start falling as exports from the Middle East gradually increase and shut-in production restarts, taking Brent to an average of $77 a barrel by the second quarter of 2027. It expects most shut-in production to be largely restored in the second half of 2027, when rebuilding inventories gradually pull Brent down to an average of $67 a barrel, a figure similar to last month's STEO.
Even so, the agency cautioned that continued volatility in flows through the Strait of Hormuz and alternative routes, tied to changing conditions in the conflict, could produce sharper short-term price swings than its forecast indicates. The EIA's latest STEO was released on September 9 and completed its forecast on September 3.
Source: Rigzone
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