EIA raises fourth-quarter Brent forecast to $105 a barrel
Key Facts
The U.S. Energy Information Administration raised its forecast for the average spot price of Brent crude in the fourth quarter of 2026 to $105 a barrel, up $14 from its estimate the previous month. The revision reflects continued pressure on global supplies in the final months of the year, while the agency expects prices to remain elevated before beginning to decline as production disruptions ease. Spot Brent averaged $114 a barrel in September, up $23 from August, according to agency data. Global inventories are also expected to fall by 0.7 million barrels a day in the fourth quarter, following a decline of 1.9 million barrels a day in the third quarter. The figures put disrupted flows and inventory drawdowns at the center of the agency’s rationale for its fourth-quarter forecast.
The agency expects Brent to average $96 a barrel in 2026, compared with a previous estimate of $91 in its September report, and raised its 2027 forecast to $84 from $74. The 2026 average remains above the $69 recorded in 2025. The annual forecast does not mean the price will stay at one level throughout the year; the $105 estimate for the fourth quarter applies only to that period’s average. The agency said attacks on Saudi Arabia’s East-West pipeline highlight the "potential for continued volatility in actual oil flows and prices." Its outlook beyond that period depends on the extent of production recovery and the easing of restrictions that have limited crude reaching markets.
Oil production shut in fell to an average of 4.8 million barrels a day in September, from 5.8 million in August, after peaking at 10.9 million barrels a day in May. Even so, the EIA assumes shut-in production will average 4.5 million barrels a day in the fourth quarter. September’s decline in outages from the May peak points to a partial improvement in supply, but does not eliminate the ongoing shortfall in available volumes. Before the attacks, Saudi Arabia’s East-West pipeline carried more than 5.0 million barrels a day of exports through the Red Sea port of Yanbu. After repairs, flows partially resumed starting Sept. 22, according to the agency.
The agency expects bypass routes for disrupted flows, including pipelines, overland routes and ship-to-ship transfers, to help gradually reduce shut-in volumes. Supply plans also include new pipeline capacity in the United Arab Emirates, which the agency expects to enter service in 2027. On that basis, it expects shut-in production to fall from 4.5 million barrels a day in the fourth quarter of 2026 to 2.7 million in the first quarter of 2027. It also expects most regional production to return to pre-conflict averages by the end of the second quarter of 2027. At that point, it sees Brent averaging $87 a barrel.
The expected decline extends into the final quarter of 2027, when the agency expects Brent to fall to an average of $74 a barrel as global inventories rebuild during the year. That follows a projected increase in inventories, compared with their declines in the second half of 2026, according to the agency’s estimates. For fuels, the agency expects U.S. retail diesel prices to remain above $6 a gallon in October before gradually falling to an average of about $4.50 in 2027. It links those estimates to a tight diesel market and supply disruptions that have kept prices elevated. The timing of a return to lower price levels depends on the path of production recovery and inventory rebuilding.
The Short-Term Energy Outlook was released on Oct. 6, after its forecasts were locked on Oct. 1, so its figures are based on the assumptions available when it was finalized. EL7 data showed Brent closing at $110.8 a barrel on Oct. 29 and then at $112.93 on Oct. 30. Those closes came after the agency’s forecast cutoff date and were not inputs to its published estimate. The agency is scheduled to issue its next update on Nov. 10, 2026. The next report will allow a review of the October assumptions in light of data and developments that followed preparation of the current outlook.