The U.S. Energy Information Administration raised its 2026 and 2027 oil price forecasts on Wednesday, citing rapidly falling global stockpiles tied to lost Middle Eastern supply. The same day, Brent crude crossed $101 a barrel for the first time since July as fighting between the U.S. and Iran escalated in the Persian Gulf.
Brent tops $101 as fighting escalates
Crude jumped more than 3% on Wednesday as fighting between the U.S. and Iran escalated in the Persian Gulf, raising fears that energy exports through the Strait of Hormuz will fall. Brent futures rose 3.4% to $101.25 a barrel, the first time the benchmark crossed $101 since July. WTI futures traded 3.6% higher to $96.38.
The U.S. military destroyed five Iranian crude oil tankers on Tuesday in retaliation for attempted attacks on an American warship. U.S. Central Command said the warship evaded the attacks and no American personnel were harmed.
EIA lifts 2026 and 2027 price forecasts
The Energy Information Administration raised its crude oil price forecasts for 2026 and 2027, citing rapidly falling global stockpiles tied to lost Middle Eastern supply from the Iran conflict. The agency now expects Brent to average around $91 a barrel this year, nearly 5% above its prior forecast. WTI is projected to average $84.65 a barrel, also up nearly 5%.
EIA finalized its forecast inputs on Sept. 3, before the latest escalation. Global oil inventories have declined by 400 million barrels so far in 2026 and will keep falling through year-end, the agency said. Middle East production shut-ins increased to 6.7 million barrels a day in August from 5 million barrels a day in July.
Supply seen recovering slowly through 2027
The EIA expects Middle East output to rise in coming months as flows through the Strait of Hormuz gradually increase, though some export constraints are assumed to persist through the end of 2026. Crude output from the region is expected to stay below pre-conflict averages until the second quarter of 2027. Production shut-ins are forecast to average 5.7 million barrels a day in the fourth quarter.
Goldman Sachs said the escalation has raised the probability that Brent could exceed $120 a barrel if exports fail to recover in the coming months due to attacks on tankers. The bank's base case remains that Persian Gulf exports gradually recover as producers adapt through alternative shipping routes.
Sources: Investing.com, CNBC
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