The US Energy Information Administration or EIA has stated in a latest monthly update that Brent crude oil spot price has risen sharply following the onset of military action in the Middle East. Brent settled at $94 per barrel (b) on March 9, up about 50% from the beginning of the year and the highest since September 2023. Crude oil prices have risen as petroleum shipments through the Strait of Hormuz have fallen, and some Middle East oil production has been shut in. EIA has assumed that shut-in production will gradually ease as transit through the Strait resumes.

EIA has forecast the Brent crude oil price will remain above $95/b over the next two months, before falling below $80/b in the third quarter of 2026 and around $70/b by the end of the year. It expects prices to average $64/b in 2027. This price forecast is highly dependent on modelled assumptions of both the duration of conflict in the Middle East and resulting outages in oil production. It noted that higher oil prices lead to more US crude oil production. It expects the US crude oil production will average 13.6 million barrels per day (b/d) in 2026 and rise to 13.8 million b/d in 2027. Its 2027 forecast is 0.5 million b/d higher than last month’s forecast.

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