The U.S. Energy Information Administration raised its 2026 Brent crude forecast by more than $5 a barrel and its 2027 forecast by $10 a barrel, citing attacks on Saudi oil infrastructure that pushed prices as high as $131 in September. The agency still expects prices to ease from October's elevated levels as shut-in production gradually returns.
EIA lifts Brent forecast for a third straight month
The EIA's October short-term energy outlook (STEO), released on October 6, now sees Brent crude averaging $96.32 a barrel in 2026 and $83.74 a barrel in 2027, up from September's forecast of $91.01 and $73.74 respectively. It marks the third consecutive increase in the EIA's Brent price projections for both years.
The agency noted that the Brent spot price averaged $114 a barrel in September, $23 higher than in August. According to the EIA: "Prices rose following increased attacks on oil infrastructure and tankers around the Middle East." The most significant of these, the agency said, were strikes on Saudi Arabia's East-West pipeline, which temporarily halted flows on a route that bypasses the Strait of Hormuz and had been shipping more than 5 million barrels a day of exports via the Red Sea port of Yanbu.
Pipeline disruption drove a September spike
The pipeline disruption pushed the daily Brent spot price as high as $131 a barrel on September 15 as buyers scrambled to secure near-term supplies after losing Saudi exports. Prices eased in the last week of September once the pipeline was repaired and partially resumed flows on September 22.
Despite the attacks, the EIA estimates that Middle East oil exports increased in September compared with August, while crude production shut-ins fell to 4.8 million barrels a day from 5.8 million in August and a peak of 10.9 million in May. Even so, the agency forecasts that Brent will average $105 a barrel in the fourth quarter of 2026, $14 higher than last month's outlook, assuming shut-in production averages 4.5 million barrels a day over that period. High tanker rates, which reached record levels in September, reflect rising insurance costs and are pushing up delivered crude prices to refiners, while ships taking longer routes to avoid conflict zones are limiting the number of available vessels.
Prices expected to ease as flows normalize
The EIA still expects prices to generally fall from their early-October average as workarounds, including bypass pipelines and new capacity expected online in 2027 in the United Arab Emirates, gradually reduce shut-in volumes. It projects Brent decreasing to $87 a barrel by the second quarter of 2027, then easing further to $74 by the fourth quarter as depleted global inventories rebuild. The agency cautioned that continued volatility in crude flows through the Strait of Hormuz could still produce sharper short-term swings than its forecast indicates.
Standard Chartered Bank's energy research team struck a similar note in a report sent to Rigzone, expecting crude to stay elevated but volatile with risks skewed to the upside. The bank projects ICE Brent averaging $92 a barrel in 2026 and $89.50 in 2027, with quarterly estimates ranging from $101 in the fourth quarter of 2026 down to $84 in the fourth quarter of 2027.
Source: Rigzone
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