EIA Cuts Oil Price Estimates as Middle East Supply Returns

By Anthony Harrup

The U.S. Energy Information Administration lowered its oil price estimates for this year and next as the resumption of oil shipments out of the Persian Gulf under the U.S.-Iran agreement leads to a recovery in production and the rebuilding of depleted inventories.

In its latest Short Term Energy Outlook, the EIA said Tuesday it expects most crude production and trade patterns to return to near pre-conflict levels by the end of this year, and for most of the shut-in production to be back online in the first quarter of 2027.

The agency cut its average 2026 price estimate for Brent crude to $82 a barrel from $95 a barrel previously, and lowered its forecast for U.S. benchmark West Texas Intermediate to $76 a barrel from $88 a barrel. For 2027, the EIA sees Brent averaging $65 a barrel and WTI $61 a barrel, down from $79 and $74 a barrel, respectively.

"Restocking strategic and commercial reserves will attenuate this decline in price," the EIA said.

The agency sees global inventory draws of 2.2 million barrels a day for the third quarter compared with its previous estimate of a 7 million barrel-a-day decline. It then predicts inventory builds of 2.7 million barrels a day in the fourth quarter and 5 million barrels a day in 2027.

"Inventory draws continue in 3Q26 because much of the increased tanker traffic is made up of previously stranded oil tankers both inside and outside of the strait," the EIA said. "Next year, we expect that rising oil production will result in the market shifting back to the pre-conflict state of oversupply."

Write to Anthony Harrup at anthony.harrup@wsj.com

(END) Dow Jones Newswires

July 07, 2026 13:12 ET (17:12 GMT)