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Informist, Wednesday, Mar. 11, 2026

 

MUMBAI – The US Energy Information Administration expects Brent crude oil prices to remain above $95 per barrel for the next two months due to the military conflict in West Asia and the subsequent loss in oil supplies from the region, before falling below below $80 per barrel in the third quarter of 2026, and to around $70 per barrel by the end of the year, the agency said in its Short-term Energy Outlook for March.

 

EIA expects Brent crude oil prices to average $91 per barrel in the second quarter of 2026. Crude oil prices are expected to rise due to extended closure of the Strait of Hormuz, which is a major oil transit chokepoint through which nearly 20% of global oil supply flows. Although the Strait of Hormuz is not physically blocked, the threat of attack by Iran and the cancellation of 

insurance coverage have led most tankers to avoid transiting the Strait.

 

"As a result, some oil production in the region has been shut in. If this reduction in vessel volume persists, oil storage behind the chokepoint will quickly fill, causing oil producers to shut in even more production, lending further support to oil prices," the agency said. It assumes the shut-in oil production will peak in early April, mostly in Iraq with smaller volumes in Kuwait, the United Arab Emirates, and Saudi Arabia. 

 

It then expects the shut-in production to gradually ease as transit through the Strait resumes, which then will lead to global oil production exceeding consumption again. This will result in an increase in global oil inventories by an average of 1.9 million barrels per day in 2026 and 3.0 million barrels per day in 2027. As inventories build, the agency forecasts that Brent crude price will fall to an average of $70 per barrel in the fourth quarter of 2026 and further to $64 per barrel in 2027.

 

As for West Texas Intermediate crude oil on the New York Mercantile Exchange, the US energy agency now expects WTI prices to average $74 per barrel this year, substantially higher than its previous forecast. In 2027, the agency expects WTI crude oil prices to average higher at $61 per barrel from $49 per barrel projected earlier.

 

The agency expects higher crude oil prices to lead to more production in the US. EIA now expects crude oil production in the US to average 13.6 million barrels per day in 2026 and 13.8 million barrels per day in 2027. "Our 2027 forecast is an upward revision of about 0.5 million b/d (4%) from last month's Short-Term Energy Outlook," it said. "Because changes in oil prices take time to affect production--moving from investment decisions to rig deployment to well completion and first oil--the effect of higher prices in our forecast is more pronounced in 2027 than in 2026."

 

At 1245 IST, the May futures contract of Brent crude oil on the Intercontinental Exchange was $87.67 per barrel, down 0.1%. The April contract of WTI crude on the New York Mercantile Exchange was up 0.8% at $84.12 per barrel.  End

 

US$1 = INR 91.95

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Reshma Ravi and Ashutosh Pati

Edited by Vandana Hingorani

 

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