Middle East Oil Output to Remain Below Pre-Conflict Levels in 2027

The US Energy Information Administration (EIA) has forecast that Middle East oil output will remain below pre-conflict levels in 2027, despite potential normalization of trade patterns by early next year.

The region's producers have been forced to sharply reduce production due to disruptions in shipping through the Strait of Hormuz and attacks on energy infrastructure, resulting in a significant reduction in global supply and pushing oil prices to multi-year highs.

In July, an estimated 5.5 million barrels per day of Middle East oil output was shut-in, representing over 5% of global consumption.

The EIA expects flows through Hormuz to remain constrained until September, but even if trade patterns normalize and most Middle East oil output recovers to pre-conflict levels by early 2027, about 600,000 barrels per day of production will remain shut-in through the end of the year.