Oil Output to Recover by End of Year, Prices Expected to Plummet

The U.S. Energy Information Administration (EIA) has revised its forecast for global oil output, predicting that it will return to pre-Iran war levels by the end of this year.

This comes after a months-long blockade of the Strait of Hormuz in the war forced refiners from Europe to Asia to reduce fuel output. Although vessel movement through the waterway has increased following a preliminary deal between the U.S. and Iran, passage is not yet totally safe.

The EIA expects most of the oil output previously shut in across the Middle East to return online by the first quarter of 2027, lifting global supply and reducing withdrawals from stockpiles.

This will put downward pressure on crude oil prices, which are expected to average around $65 per barrel through next year. The EIA had previously forecasted over $79 in 2027.