【Iran Crisis】EIA: Brent crude oil prices will remain above $95 in the next two months, expected to fall back to around $70 by the end of the year

The U.S. Energy Information Administration (EIA) reported in its monthly report that due to supply disruptions caused by the Iran conflict, Brent crude oil prices are expected to remain above $95 per barrel for the next two months.

The EIA forecasts that as shipping through the Strait of Hormuz gradually resumes, oil prices may fall below $80 per barrel in the third quarter of this year and drop to around $70 by the end of the year. The agency also raised its 2026 average price forecast for Brent crude oil by 37%, to $79 per barrel.

The Strait of Hormuz, a critical route for one-fifth of global oil transportation, is currently nearly blocked, leading to further declines in oil production in the Middle East in the coming weeks. The EIA states that as transportation resumes, related supply restrictions are expected to ease gradually, and global oil production will continue to exceed demand.

Rising oil prices are also expected to stimulate increased U.S. crude oil production. The EIA has also raised its forecast for U.S. oil output, expecting daily production to reach 13.61 million barrels in 2026 and further increase to 13.83 million barrels in 2027. Previously, the forecasts were 13.60 million barrels for 2026 and 13.32 million barrels for 2027.

Additionally, the EIA predicts that U.S. retail gasoline prices will rise to $3.34 per gallon, up 14.7% from previous estimates; diesel prices are expected to reach $4.12 per gallon, an increase of about 20.1%.

White House: Oil Price Rise Is Only Temporary

White House spokesperson Karoline Leavitt stated that the recent rise in oil prices is only temporary, and that the U.S. military actions will ultimately lead to lower energy prices. The U.S. military is developing additional plans under the president’s orders to ensure the smooth shipping through the Strait of Hormuz.

However, market analysts say that if the International Energy Agency (IEA) fails to reach a consensus on releasing strategic petroleum reserves, oil prices could rebound quickly. Some European countries have already low levels of strategic reserves and may be hesitant to release them. Even if measures are taken, their effects would only last for a few weeks and would further deplete global emergency stocks.

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