Middle East Oil Output Set to Remain Below Pre-Conflict Levels Through 2027
The US Energy Information Administration (EIA) has revised its forecast for Middle East oil output, stating that some producers will struggle to restore production to pre-conflict levels by the end of 2027. The EIA estimates that about 5.5 million barrels per day of oil output was shut-in during July, which accounts for over 5% of global consumption.
Disruptions to shipping through the Strait of Hormuz and attacks on energy infrastructure have led to a sharp reduction in production, affecting global supply and driving up oil prices to multi-year highs. The EIA expects that flows through Hormuz will be severely constrained through August but assumes shipments will start to slowly increase in September.
Even if most Middle East oil output and global trade recover to pre-conflict levels by early 2027, the EIA predicts that around 600,000 barrels per day of production from the region will still be shut-in through the end of 2027. The agency has revised its oil price forecasts for both 2026 and 2027, with Brent crude prices expected to average $86.81 a barrel in 2026 and WTI prices averaging $80.88.