Uche Cecil Izuora
The U.S. Energy Information Administration (EIA) has raised its global oil production forecast in its July Short-Term Energy Outlook (STEO).
The outlook forecast follows recovery of shipping through the Strait of Hormuz following the June 18 agreement between the United States and Iran to reopen the strategic waterway.
The EIA now expects global crude oil production and trade flows to return to near pre-conflict levels by the end of 2026, with most previously shut-in production restored during the first quarter of 2027.
The Agency said rising global supply is expected to put downward pressure on crude oil and gasoline prices.
The EIA, forecasts Brent crude to average $74/bbl in the third quarter of 2026, down sharply from last month’s outlook, before declining to an average of $65/bbl in 2027 as global inventories build.
It also expects U.S. crude oil production to continue growing, averaging 13.8 MMbpd in 2026 and 14.0 MMbpd in 2027, compared with 13.6 MMbpd in 2025.
On the natural gas side, record U.S. production is expected to support growing demand while keeping prices relatively moderate. Henry Hub spot prices are forecast to average $3.67/MMBtu in 2026 before easing to $3.49/MMBtu in 2027, while U.S. LNG exports are projected to increase from 15 Bcfd in 2025 to 19 Bcfd by 2027.
Lower crude prices are also expected to reduce U.S. retail gasoline prices, with EIA forecasting average pump prices of approximately $3.60/gal during the second half of 2026