EIA Raises Brent Forecast to $98 as Iran War Disrupts Oil Supplies
The US Energy Information Administration (EIA) has revised its oil price forecasts upward, citing the impact of the US-Israeli war with Iran on global supplies. The conflict has disrupted shipments through the Strait of Hormuz, a critical route handling about 20% of global oil supplies, pushing prices higher. The EIA now expects the global benchmark Brent crude to average $98 a barrel in 2026, an 8% increase from its previous projection.
The war has led to surging oil and fuel prices due to disrupted shipments and retaliatory attacks on regional energy infrastructure by Iran. Brent crude is forecast to average $105 a barrel in the fourth quarter, $14 above the EIA’s earlier estimate. US retail diesel prices, which hit record highs last month, are projected to remain above $6 a gallon in October before gradually declining to an average of about $4.50 in 2027.
However, Middle Eastern oil production and exports are expected to recover gradually as transit through the Strait of Hormuz improves. Producers are increasingly using alternative export routes and ship-to-ship transfers to bypass disruptions. These measures helped restore Gulf oil flows, excluding Iran, to more than 81% of pre-war levels in September.
As supply flows normalize and inventories rebuild, Brent is expected to average $84 a barrel in 2027, $10 above the agency’s previous forecast. The EIA noted that crude-production shutdowns are expected to decline from 4.5 million barrels per day in the fourth quarter of 2026 to 2.7 million barrels per day in the first quarter of 2027.