The U.S. Energy Information Administration (EIA) predicted a bigger oil market crunch in 2026 and a bigger oil glut in 2027 in its latest short term energy outlook (STEO), compared to its previous August STEO.
In its September STEO, the EIA projected that world petroleum and other liquid fuels consumption will outweigh production by 1.97 million barrels per day in 2026 and that world petroleum and other liquid fuels production will outweigh demand by 4.90 million barrels per day in 2027.
The EIA’s August STEO saw world petroleum and other liquid fuels consumption outweighing production by 1.91 million barrels per day in 2026 and world petroleum and other liquid fuels production outweighing demand by 4.78 million barrels per day in 2027.
For 2026, the EIA’s September STEO sees consumption coming in at 102.59 million barrels per day and production averaging 100.62 million barrels per day. The EIA projects that demand will hit 104.98 million barrels per day next year and that production will come in at 109.88 million barrels per day.
In its previous STEO, the EIA projected that consumption would come in at 102.73 million barrels per day and production would average 100.82 million barrels per day in 2026. The EIA saw demand hitting 104.96 million barrels per day and production coming in at 109.74 million barrels per day next year in that STEO.
The EIA’s September STEO forecasts that the oil market crunch will come in at 2.96 million barrels per day in the third quarter of 2026 and 1.71 million barrels per day in the fourth quarter, before swinging to a glut of 3.01 million barrels per day in the first quarter of next year, 5.05 million barrels per day in the second quarter, 5.23 million barrels per day in the third quarter, and 6.25 million barrels per day in the fourth quarter.
There was an oil market crunch of 3.86 million barrels per day in the second quarter and a glut of 0.71 million barrels per day in the first quarter, the EIA’s latest STEO showed.
This STEO highlighted that, in 2025, world petroleum and other liquid fuels production averaged 106.24 million barrels per day and world petroleum and other liquid fuels consumption came in at 104.28 million barrels per day. This represented a glut of 1.96 million barrels per day in 2025, the September STEO outlined.
“Global oil prices rose to an average of $91 per barrel in August, $7 per barrel higher than in July,” the EIA said in its latest STEO.
“Prices remain elevated in response to falling global oil inventories, which we estimate have decreased by 400 million barrels so far this year. We expect inventories will continue falling through the end of 2026, which will keep prices near the August monthly average in the coming months,” it added.
“We now forecast the Brent crude oil spot price to average around $90 per barrel in 2H26. As oil production rises into next year, and as inventories rebuild, we expect the Brent spot price to gradually fall to an average of $74 per barrel in 2027,” it continued.
The EIA highlighted in its STEO that, “because of the large drawdown in global inventories driven by continued disruptions of crude oil production”, it forecasts that oil prices “will remain elevated until global oil flows return to normal and oil inventories can be replenished”.
“We estimate that global oil inventories fell by an average of 3.9 million barrels per day in 2Q26 and that they will fall by an additional 3.0 million barrels per day on average in 3Q26 and 1.7 million barrels per day on average in 4Q26,” it added.
“As a result, we forecast the Brent crude oil spot price will average around $90 per barrel in the second half of 2026, $8 per barrel higher than in last month’s STEO,” it pointed out.
The EIA noted in its STEO that, as exports from the Middle East gradually increase and shut-in oil production restarts, it forecasts that oil prices will begin to fall, decreasing to an average of $77 per barrel by 2Q27.
“We assess that most shut-in oil production will be largely restored in 2H27 and that global oil inventories will again start building, gradually lowering oil prices to an average of $67 per barrel in 2H27, similar to last month’s STEO,” the EIA said.
“However, we expect continued volatility in flows both through the Strait of Hormuz and through alternative routes based on changing conditions in the conflict, which will likely lead to more volatility in short-term price movements than our forecast indicates,” it warned.
In a section of its August STEO highlighting its global oil market assumptions, the EIA said it forecasts that oil production in the Middle East will rise in the coming months because of gradually increasing flows through the Strait of Hormuz and the use of alternative routes out of the region. The EIA added, however, that it assumes some constraints to exporting oil from the Middle East will persist through the end of the year, which it said keeps crude oil production in the region below pre-conflict averages until the second quarter of 2027.
The EIA’s latest STEO was released on September 9 and completed its forecast on September 3.
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