The US Energy Information Administration (EIA) raised its oil price forecasts for a fourth consecutive month as falling global inventories and continued disruptions to oil production and shipping in the Middle East have keep supplies tight.
In its November Short-Term Energy Outlook (STEO), the EIA said Brent crude, the international oil benchmark, averaged $124 per barrel in October, up $10 from September and its highest inflation-adjusted level since July 2022.
Oil prices rose for a third consecutive month as global inventories continued to decline, while attacks on tankers in the Middle East and the Black Sea disrupted shipments and pushed up transportation costs.
The agency raised its forecast for average Brent prices this year to $97.44 per barrel from $96.32 in its previous outlook. Its forecast for West Texas Intermediate (WTI) crude edged up to $88.29 from $88.21.
For 2027, the EIA increased its Brent price forecast to $85.78 per barrel from $83.74 and its WTI forecast to $80.54 from $79.74, marking the fourth consecutive monthly upward revision.
Despite the increases, the agency expects oil prices to decline next year as production recovers and global inventories begin to rebuild.
The EIA said oil exports from the Middle East increased slightly in October following the restart of Saudi Arabia’s East-West Pipeline. Ship-to-ship transfers along Oman’s coast also helped maintain flows through the Strait of Hormuz, helping push Brent spot prices below $100 per barrel on Nov. 4.
Still, with shipments from the region remaining constrained, the agency expects Brent prices to average around $100 per barrel in November and December.
– Global oil inventories set to rise as production recovers in 2027
Global oil inventories fell by an estimated 1.2 million barrels per day (bpd) in the third quarter of 2026 but are expected to begin rising in the final quarter.
The EIA forecasts that inventories will increase by an average of 3.5 million bpd in the first half of 2027, pushing Brent prices below $90 per barrel in the second quarter.
Most oil production in Middle Eastern countries other than Iran is expected to return to pre-conflict levels by the end of the second quarter of 2027, although Iranian oil exports are likely to remain constrained.
As supplies recover and inventories rebuild, Brent prices are forecast to gradually decline to an average of $77 per barrel in the final quarter of next year.
The agency warned, however, that oil shipments through the Strait of Hormuz and alternative routes would remain vulnerable to disruptions, leaving prices exposed to further volatility.
– Crude production to hit record high in 2027
Global oil production is expected to rebound sharply in 2027 after falling this year because of supply disruptions in the Middle East.
The EIA forecasts that global production of crude oil and other liquid fuels will decline by 4.6 million bpd in 2026 before increasing by 6.7 million bpd in 2027.
Total production is expected to average 101.69 million bpd this year and 108.4 million bpd next year.
The recovery is expected to be supported by alternative export routes, including pipelines, overland transport and ship-to-ship transfers, as well as new pipeline capacity in the United Arab Emirates scheduled to come online in 2027.
US crude oil production, meanwhile, is forecast to average 13.86 million bpd this year before climbing to a record 14.3 million bpd in 2027.
The EIA said oil production in the Middle East has also been gradually recovering as the amount of output shut in because of the conflict declines.
Crude oil production shut-ins in the region peaked at 10.9 million bpd in May before falling to an average of 2.5 million bpd in October.
