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Global crude oil prices are expected to decline to an average of USD 79 per barrel by 2027 as oil production in the Middle East gradually rises, according to the latest report by the U.S. Energy Information Administration (EIA).
The report stated that Brent crude oil prices, which surged sharply in April due to disruptions linked to the Strait of Hormuz, are expected to ease over the coming quarters as oil supply conditions improve. "As oil production in the Middle East rises, we expect crude oil prices to fall, dropping to an average of USD 89/b in 4Q26 and USD 79/b in 2027," the report stated. According to the EIA, Brent crude oil spot prices touched a high of USD 138 per barrel on April 7 and averaged USD 117 per barrel during April. The report noted that the effective closure of the Strait of Hormuz tightened global oil supplies and pushed oil inventories lower. "We expect global oil inventories will fall by an average of 8.5 million b/d in the second quarter of 2026 (2Q26), keeping Brent prices around USD 106/b in May and June," the report stated. The report highlighted that along with crude oil, global liquefied natural gas (LNG) prices also remain elevated due to reduced supply flows through the region. "Global LNG prices remain elevated as a result of reduced flows through the Strait of Hormuz, with a wide spread between U.S. domestic natural gas prices and international markets," the report stated. The EIA also highlighted developments in the US LNG sector, noting that US liquefied natural gas export capacity increased by around 0.9 billion cubic feet per day (Bcf/d) in April. The growth was led by the first shipment from Golden Pass LNG's Train 1 and additional production from Corpus Christi Stage 3. The report further noted that Corpus Christi Train 6 is expected to start operations in summer 2026, adding another 0.2 Bcf/d of export capacity. However, the agency said long lead times for developing new export infrastructure are likely to limit faster growth in US LNG exports. The report also mentioned major developments within OPEC. The United Arab Emirates (UAE) officially exited OPEC effective May 1, 2026, and the latest Short-Term Energy Outlook (STEO) by US EIA has incorporated this change. "OPEC production numbers in this outlook exclude data from the UAE, both for historical and forecast periods," the report said. Because the UAE previously held spare crude oil production capacity, the EIA has revised its estimates for OPEC spare capacity. The agency now expects OPEC's spare production capacity to average 2.5 million barrels per day in 2027, compared to its earlier forecast of 3.8 million barrels per day. The report comes amid continued uncertainty in global energy markets due to geopolitical tensions and supply disruptions in the Middle East region. (ANI)
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