Middle East Oil Output Still Far From Pre-Conflict Levels

The U.S. Energy Information Administration (EIA) has revised its forecast for oil production in the Middle East, citing ongoing tensions in the region. The EIA expects that some part of the oil production in the area will remain shut in through the end of next year.

The Strait of Hormuz, a critical waterway through which nearly 20% of global oil exports pass, has seen reduced traffic due to renewed tensions in the Middle East. The EIA estimates that oil flows through the Strait will slowly increase in September, but some production shut-ins will continue.

According to the EIA's Short-Term Energy Outlook (STEO), about 600,000 barrels per day (bpd) of crude oil production will remain offline by the end of 2027. This is down from a peak of 10.1 million bpd in March and May.