In its latest short term energy outlook (STEO), the U.S. Energy Information Administration (EIA) raised its 2026 Brent crude oil spot price forecast by more than $5 per barrel and its 2027 Brent price forecast by $10 per barrel, compared to its previous STEO.
The EIA’s latest STEO, which was released on October 6, sees the Brent crude spot price averaging $96.32 per barrel this year and $83.74 per barrel next year. These projections mark a third consecutive EIA Brent price projection increase for both 2026 and 2027.
In its previous STEO, which was released in September, the EIA saw the Brent spot price averaging $91.01 per barrel this year and $73.74 per barrel next year. The EIA’s August STEO projected that the Brent price would come in at $86.81 per barrel in 2026 and $69.39 per barrel in 2027, and its July STEO saw the Brent price averaging $81.91 per barrel this year and $64.76 per barrel next year. In its June STEO, the EIA expected the Brent crude oil spot price to come in at $95.39 per barrel in 2026 and $79.39 per barrel in 2027.
The EIA highlighted in its October STEO that the Brent crude oil spot price increased to an average of $114 per barrel in September, which it pointed out was $23 per barrel higher than in August.
“Prices rose following increased attacks on oil infrastructure and tankers around the Middle East,” the EIA noted in its latest STEO.
“The most notable among these developments were attacks on Saudi Arabia’s East-West oil pipeline, which temporarily halted flows on a crucial bypass used to circumvent the Strait of Hormuz,” it added.
The EIA revealed in its STEO that, before the attacks, it estimated this pipeline was shipping more than 5.0 million barrels per day of oil exports via Saudi Arabia’s Yanbu port on the Red Sea.
“The disruption of the pipeline led to the daily Brent spot price reaching as high as $131 per barrel on September 15, as buyers scrambled to secure near-term supplies due to the loss of Saudi exports,” the EIA highlighted.
“Daily prices eased somewhat during the last week of September as the East-West pipeline in Saudi Arabia was repaired and partially resumed flows as of September 22,” it added.
“Some of the decrease in Red Sea exports has been offset by shifting exports back through the Strait of Hormuz. Ship tracking data from Vortexa indicates that oil shipments through the Strait of Hormuz increased slightly in September,” it continued.
Increased Middle East Oil Exports
The EIA revealed in its October STEO that it estimates that oil exports from the Middle East increased in September, compared with August, despite the increase in attacks. It also revealed that it estimates that crude oil production shut-ins fell.
“We assess that crude oil production shut-ins averaged 4.8 million barrels per day in September, down from 5.8 million barrels per day in August and down from 10.9 million barrels per day at the peak in May,” it noted.
The EIA pointed out in its latest STEO that it forecasts that the Brent crude oil spot price will average $105 per barrel in the fourth quarter of 2026, which it highlighted is $14 per barrel higher than in last month’s STEO.
“We assume that oil flows from the Middle East remain constrained through 4Q26, leading to shut-in production averaging 4.5 million barrels per day during that quarter,” the EIA said in the STEO.
“With export routes still constrained, the attacks on the East-West pipeline highlight the potential for continued volatility in physical oil flows and oil prices amid ongoing withdrawals from oil inventories,” it added.
The EIA went on to warn in its STEO that heightened risk associated with oil tankers transiting the region has added to shipping costs and increased the risk premium reflected in oil prices.
“High tanker rates, which reached record levels in September, reflect increasing insurance costs and are putting additional upward pressure on delivered crude oil prices to refiners,” it said.
“Ships are also taking longer routes to avoid conflict zones, which is limiting the number of available vessels,” it added.
“With continued disruptions of crude oil production and high transportation costs and risk premiums, we forecast that oil prices will remain elevated until constraints on oil flows from the Middle East resolve and oil inventories can be replenished,” it continued.
“We estimate that global oil inventories fell by an average of 1.9 million barrels per day in 3Q26 and will fall an additional 0.7 million barrels per day on average in 4Q26,” it noted.
EIA Expects Oil Prices to Generally Fall from Oct Average
The EIA went on to highlight in its latest STEO that, although it raised its crude oil price forecast from last month, it still expects oil prices will generally fall from their early October average.
“We assume that the combination of workarounds to export oil from the Middle East (such as pipeline and overland bypass routes, the use of ship-to-ship transfers, and new bypass pipeline capacity expected to come online in 2027 in the United Arab Emirates) will help shut-in volumes gradually fall through the STEO forecast period,” the EIA said.
“We expect the majority of production in the region to return to pre-conflict averages by the end of 2Q27, and we forecast the Brent spot price decreases to an average of $87 per barrel by 2Q27,” it added.
“As depleted global oil inventories build throughout next year, oil prices gradually fall to an average of $74 per barrel in 4Q27,” it continued.
“However, we expect the conflict in the Middle East will lead to continued volatility in crude oil flows both through the Strait of Hormuz and through alternative routes, which will likely lead to more volatility in short-term price movements than our forecast indicates,” it warned.
Elevated But Volatile
In a report sent to Rigzone late Tuesday by the Standard Chartered Bank team, the company’s Energy Research Head, Emily Ashford, outlined that Standard Chartered Bank’s “core view” for the crude oil market is that it expects crude prices “to remain elevated but volatile, with risks still skewed to the upside”.
“However, the market is becoming increasingly effective at adapting to disrupted trade routes, limiting the price impact of improving or deteriorating geopolitical headlines alone,” Ashford noted in the report.
Ashford went on to warn that recovering volumes should not be mistaken for normalization.
“Logistics remain costly, product markets tight, and strategic and commercial inventories depleted,” Ashford said.
“We therefore expect the geopolitical risk premium to ebb and flow, with prices remaining particularly sensitive to evidence of actual supply loss or disruption,” Ashford added.
“Improving logistics or diplomatic progress could drive sharp corrections, but rebuilding inventories and restoring normal trade economics should be lengthy processes, keeping the medium-term price floor well above pre-conflict levels,” Ashford continued.
The report showed that Standard Chartered Bank expects the ICE Brent nearby future crude oil price to average $92.00 per barrel in 2026 and $89.50 per barrel in 2027.
A quarterly breakdown included in this report revealed that Standard Chartered Bank sees the commodity coming in at $101.00 per barrel in the fourth quarter of this year, $96.00 per barrel in the first quarter of 2027, $91.00 per barrel in the second quarter, $87.00 per barrel in the third quarter, and $84.00 per barrel in the fourth quarter.
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