EIA Sees Brent Falling to $74 in 2027 Even as Global Oil Stocks Drain
Finalised before Brent's return to $100, the agency's September outlook assumes Gulf exports recover gradually but stay below pre-conflict levels until mid-2027.
The US Energy Information Administration expects oil prices to fall back sharply next year, forecasting that Brent crude will average about $74 a barrel in 2027, even as it estimates that the world has already drawn down roughly 400 million barrels of oil inventories in 2026.
The projection, published on 9 September in the agency's monthly Short-Term Energy Outlook, was finalised on 3 September, before Brent climbed back above $100 this week. It sees the benchmark averaging around $90 in the second half of this year and $91 for 2026 as a whole.
Context: an outlook built on a gradual recovery
The central assumption is that exports from the Middle East recover step by step. The EIA expects production in the region to increase through the end of the year as more traffic moves through the Strait of Hormuz and alternative export routes are used, but to stay below its pre-conflict average until the second quarter of 2027.
In the meantime, the world is running down its buffers. Global oil prices averaged $91 a barrel in August, $7 more than in July, as stocks fell. The strain is most acute in middle distillates. US inventories of diesel and related fuels are forecast to drop below 100 million barrels this month and to remain under their five-year average through much of next year.
American supply is one of the few bright spots in the forecast. The EIA expects US crude output to average a record 13.8 million barrels a day this year and 14.3 million in 2027.
Why it matters
A forecast of $74 oil next year is, in effect, a forecast that today's crisis is temporary. It lines up with what the futures market has been signalling: while prompt Brent contracts have surged, oil for delivery several years ahead has remained close to $70 a barrel.
For consumers, the path the EIA describes would bring meaningful relief. It expects US retail petrol to average $3.84 a gallon this year and $3.35 in 2027, and diesel to fall from an average of $5.07 in 2026 to $4.40 next year.
But an outlook is only as good as its central assumption. If flows through the Gulf recover more slowly than expected, inventories that have already fallen by 400 million barrels would have less room to absorb further losses, and prices would have more room to rise. The agency's own figures show how tight the refined products market already is: it expects retail diesel to average about $5.55 a gallon in the final quarter of this year, well above its full-year average.
- Brent: about $90 in the second half of 2026, $91 for the full year and around $74 in 2027.
- Inventories: global stocks down roughly 400 million barrels so far this year.
- Gulf supply: below pre-conflict levels until the second quarter of 2027.
- US fuel prices: petrol at $3.84 a gallon in 2026 and $3.35 in 2027; diesel at $5.07 and $4.40.
- US output: 13.8 million barrels a day in 2026, rising to 14.3 million in 2027.
Outlook
The next outlook, due on 6 October, will be the first to incorporate this week's surge. Its revisions will show whether the EIA still believes the disruption to Gulf exports is easing, or whether $100 oil is starting to look less like a spike and more like a plateau.
Until then, the gap between the agency's 2027 forecast and this week's market price is a useful measure of how much the oil market is betting on a fast resolution.
Image: W.carter via Wikimedia Commons, CC BY-SA 4.0