EIA Raises Oil Price Forecast Amid Ongoing Disruptions in Strait of Hormuz

The US Energy Information Administration (EIA) has increased its forecast for oil prices in the third quarter due to ongoing disruptions in the Strait of Hormuz. Brent crude is now expected to average $86.81 per barrel, up from a previous forecast of $81.91. West Texas Intermediate (WTI) crude is predicted to average $80.88 per barrel, compared to its previous estimate of $76.26.

The EIA attributes the rise in oil prices to severe disruptions to oil shipments through the Strait of Hormuz, which have led to a decline in global oil inventories. The agency expects Brent to average $85 per barrel in the third quarter before falling to $78 in the fourth quarter as tanker traffic and production recover.

Global oil demand is forecast to decline by 1.2 million barrels per day (bpd) this year, with non-OECD countries accounting for most of the decrease. However, global oil supply is expected to increase due to rising US crude oil production, which is projected to average 13.8 million bpd this year and 14.15 million bpd next year.