Adds outlook details.
The US light sweet crude benchmark will average nearly $85/bl in the second quarter this year because of fighting in the Middle East, the US Energy Information Administration (EIA) predicted today.
WTI at Cushing, Oklahoma, is expected to average $84.56/bl across April-June, the agency said in its monthly Short-Term Energy Outlook (STEO), a $30.91/bl upward revision from its February forecast.
Crude prices have surged from about $65/bl in late-February to nearly $120/bl on 9 March as the US-Israel war with Iran has choked off flows through the strait of Hormuz. Prices on Tuesday eased to near $83/bl, after US president Donald Trump said the war was practically over.
WTI will average $73.61/bl across 2026, EIA predicts, up from $53.42/bl forecast in last month's STEO.
EIA similarly revised Brent prices higher, forecasting the global benchmark to average $90.56/bl in the second quarter before falling to $70/bl by the end of the year. The agency expects Brent will average $78.84/bl across the full year.
The EIA assumes that shut-in oil production in the Middle East will peak in early April, but a risk premium will persist in an "evolving and uncertain" environment.
The higher crude prices will entice US producers to increase output in 2026, and even more next year, reversing prior predictions that 2027 would see a decline in domestic output.
US production is set to average 13.61mn b/d in 2026, higher by 100,000 b/d from February's STEO estimate. The US outlook for output in 2027 was revised higher by 510,000 b/d to 13.83mn b/d.
The outlook for global output meanwhile was cut to 107.04mn b/d for 2026, lower by 810,000 b/d from a month ago. Global production was lifted to 109.61mn b/d, an upward revision of 860,000 b/d, with the US accounting for more than half of that gain.
The EIA lifted both US and global demand outlooks for 2026 and 2027 despite the upward revisions to oil prices. Domestic consumption of petroleum and other liquid fuels is to average 20.6mn b/d in 2026 and 20.73mn b/d, representing increases of 10,000 b/d and 70,000 b/d, respectively, from the prior STEO.
Global demand is now forecast at 105.17mn b/d in 2026 and 106.61mn b/d in 2027, for increases of 380,000 b/d and 540,000 b/d, respectively.
The EIA is still expecting a surplus of crude in 2026, but significantly less than previously forecast. Inventories will build at a pace of 1.9mn b/d this year, down from the 3.1mn b/d forecast in last month's STEO.
