The U.S. Energy Information Administration (EIA) now expects global crude oil production to approach pre-conflict levels by the end of 2026, with most previously shut-in output fully restored by January 2027.

The forecast was updated higher as supply resumes, including the reopening of the Strait of Hormuz after a June agreement, pointing to a near-full recovery in production and trade by year-end and back to normal in early 2027.

In its outlook, the EIA notes production and trade inch toward pre-conflict norms by late 2026, with full restoration not anticipated until January 2027 due to operational lags.

The crisis has highlighted concentration risk in global oil supply, fueling discussions on strategic reserves, new transit routes, supply diversification, and reforming war-risk insurance markets.

Brent crude was trading around $74 per barrel in early trading.

Markets are expected to see near-term supply surplus as Persian Gulf inventories are released to buyers.

OPEC+ faces a budget-breakeven test as Brent moves toward $65 per barrel in 2027, with potential cohesion strains as earnings and market-share pressures mount.

The forecast reflects updated supply and price expectations amid geopolitical developments affecting flows and inventories.

Geopolitical risk premiums remain a priced factor through early 2027, even with a diplomatic agreement in place.

The disruption was historically large, with ongoing risks from attacks on vessels transiting the Strait of Hormuz continuing to affect markets.

U.S. retail gasoline prices are projected to ease to about $3.80/gal in Q3 2026, with further declines toward $3.40/gal in Q4 2026 and an annual average below $3.10/gal in 2027; natural gas prices are forecast to ease, with LNG exports rising toward 19 Bcf/d by 2027.

The U.S. is expected to increase crude output gradually—from about 13.6 million bpd in 2025 to roughly 14.0 million bpd in 2027—driven by efficiency gains in shale rather than immediate price spikes.