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Informist, Wednesday, Apr. 8, 2026

MUMBAI – The US Energy Information Administration expects Brent crude oil prices to peak at $105 per barrel in Apr-Jun, before easing as production shut-ins gradually subside, assuming that the war in West Asia does not persist past April and traffic through the Strait of Hormuz slowly resumes. Prices are seen falling to an average of $88 per barrel in Oct-Dec, and to $76 per barrel in 2027, the administration said.

Oil flows through the Strait of Hormuz continue to be limited, causing oil storage to fill quickly in countries that rely on the waterway for exports. Iraq, Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, and Bahrain are expected to have collectively shut in 7.5 million barrels per day of crude oil production in March, the administration said. These production shut-ins are likely to rise to 9.1 million barrels per day in April.

Under the assumption that the war in West Asia will not continue past April, production shut-ins are expected to fall to 6.7 million barrels per day in May and return close to pre-conflict levels in late 2026, the administration said. Oil production, which is currently shut-in, is expected to gradually return as flows through the strait resume and oil trade flows adjust. "Given this relatively long adjustment period after flows through the strait resume, we expect oil prices will remain elevated, with Brent crude oil prices averaging $76 per barrel in 2027, about $23 per barrel higher than in our February short term energy outlook forecast," the administration said.

"We maintain a risk premium on crude oil prices throughout the forecast period as we expect uncertainty around future supply disruptions to keep prices above pre-conflict levels," the administration said. 

The administration has also revised its assumptions for global oil demand, based on reports of government initiatives to reduce fuel use, fuel shortages, and the curtailing of refined oil product exports. Reductions in demand are expected primarily in Asia, which is more reliant on crude oil supplies from West Asia, it said.

Global oil demand growth is expected to average 600,000 barrels per day in 2026, down from the average of 1.2 million barrels per day projected in last month's outlook, the administration said. Demand is likely to rebound next year once supply flows return later in 2026, with oil demand growing by 1.6 million barrels per day in 2027 to 106.2 million barrels per day, it said

The reduction in flows of liquefied natural gas exports through the Strait of Hormuz has reduced global supply and sharply increased the spread between the US benchmark Henry Hub spot price and European and Asian import prices, the administration said. The widening spread between US and global prices has led to a rise in liquefied natural gas exports from the US, although capacity is constrained, it said. With capacity utilisation high, only very limited flexibility exists to increase US exports, it said.

US liquefied natural gas exports in March are pegged at 17.9 billion cubic feet per day in March, an 8% increase from the January forecast. Full-year 2026 US liquefied natural gas exports will total 17 billion cubic feet per day, up from 16.4 billion cubic feet per day estimated in January, and 2027 exports will total 18.6 billion cubic feet per day, up 500,000 billion cubic feet per day from the January forecast.

At 1030 IST, the June futures contract of Brent crude oil on the Intercontinental Exchange was $95.66 per barrel, down 12.5%. The May contract of WTI crude on the New York Mercantile Exchange was down 14.3% at $96.77 per barrel.  End

US$1 = INR 92.61

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

Reported by Shreya Shetty

Edited by Akul Nishant Akhoury

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