EIA Sharply Raises 2026 and 2027 Oil Price Forecasts as Iran War Tightens Middle East Supply

The U.S. Energy Information Administration raised its oil price forecasts significantly in its latest Short-Term Energy Outlook, citing supply disruptions tied to the Iran war that are draining global stockpiles. The EIA now sees WTI averaging $84.65 per barrel in 2026, up from its prior forecast of $80.88, and projects $69.74 per barrel in 2027, up from $65.39. For Brent crude, the agency lifted its 2026 forecast to $91.01 per barrel from $86.81 and its 2027 outlook to $73.74 from $69.39.

The supply-demand picture driving those revisions is stark. The EIA estimates global oil demand ran at 103.70 million barrels per day in August against supply of only 99.63 million bpd, a gap it expects to widen slightly in September, with demand projected at 104.21 million bpd against supply of just 99.41 million bpd. OPEC+ crude production fell sharply, dropping to an estimated 33.47 million bpd in August from 35.83 million bpd in July, with a further decline to 32.75 million bpd projected for September.

The EIA assumes some constraints on oil exports from the Middle East will persist through the end of 2026, though it expects output from the region to rise in coming months as flows through the Strait of Hormuz gradually increase. On the U.S. side, the agency estimates domestic crude production rose 70,000 bpd to 13.88 million bpd in August and projects output reaching 13.96 million bpd in September and climbing to 14.46 million bpd by December 2027. The EIA also slightly trimmed its 2026 world oil demand growth estimate to a contraction of 1.69 million bpd from a previously forecast contraction of 1.25 million bpd, while raising its 2027 demand growth estimate to 2.39 million bpd from 2.23 million bpd.

On natural gas, the EIA raised its 2026 U.S. output forecast to 111.7 billion cubic feet per day from 111.2 bcf/d, with 2026 demand now seen at 92.2 bcf/d versus a prior estimate of 92.0 bcf/d, reflecting a broader projection that both U.S. natural gas supply and demand will hit record highs in 2026.