EIA raises oil output forecast after Hormuz reopening

The U.S. Energy Information Administration raised its global oil production forecast on Tuesday after the reopening of the Strait of Hormuz following a June 18 agreement between the United States and Iran.

The agency now projects that worldwide crude oil production and trade flows will recover to near pre-conflict levels by the end of this year. Most previously shut-in production is expected to return online by the first quarter of 2027.

The Brent crude oil spot price averaged $85 per barrel in June, down $22 per barrel from May and $32 per barrel from the April 2026 peak. The EIA forecasts Brent crude oil prices to average $74 per barrel in the third quarter of 2026, which is $27 per barrel lower than last month’s forecast. The agency expects Brent to fall to an average of $65 per barrel in 2027 as oil inventory builds continue.

U.S. retail gasoline prices are forecast to decline to $3.80 per gallon in the third quarter of 2026 from $4.21 per gallon in the second quarter. The EIA projects prices will drop further to about $3.40 per gallon in the fourth quarter, with the annual average falling below $3.10 per gallon in 2027.

The agency said U.S. average retail gasoline prices will average about $3.60 per gallon in the second half of this year, down from $4.48 per gallon in May.

For natural gas, the EIA forecasts Henry Hub spot prices will average close to $3.70 per million British thermal units in 2026 before easing below $3.50 per million British thermal units in 2027.