The US Energy Information Administration raised its 2026 Brent crude oil price forecast to $87 per barrel in its August Short-Term Energy Outlook, up $5 from the July estimate, as continued severe constraints on Strait of Hormuz transits force deeper production shut-ins across the Middle East.
The agency, in its report released August 11, said it increased estimates of Middle East shut-in crude oil production for the coming months compared with its July forecast. Crude oil and petroleum liquids shipped through the Strait of Hormuz averaged just 4.9 million barrels per day in the second quarter of 2026, down from 21.6 million barrels per day in the fourth quarter of 2025. Production shut-ins averaged 5.5 million bpd in July, down from an estimated 7.5 million in June.
Diesel and Gasoline Forecasts Also Raised
The EIA lifted its wholesale diesel price forecast for 2026 by 8.5 percent to $3.37 per gallon and its wholesale gasoline forecast by 5.9 percent to $2.91 per gallon. Retail gasoline is now expected to average $3.78 per gallon in 2026, up 14 cents from the July outlook. The agency attributed the fuel price increases to tighter refined products markets driven by the ongoing Hormuz disruption.
US commercial crude oil inventories were revised sharply downward, with the agency now expecting stocks to remain below the five-year low through the end of 2026. Increased crude oil exports, reduced imports, and high refinery runs since mid-April have led to consistent weekly declines. The EIA cut its 2026 inventory forecast by 8.6 percent to 396 million barrels.
Texas Data Center Pause Lowers Demand Outlook
In a notable shift, the EIA lowered its US electricity demand forecast after Texas Governor Greg Abbott announced a pause on new data center development on August 3. The agency now expects Texas electricity load to grow by 6 percent in 2027, down sharply from the 14 percent growth projected in the previous STEO.
Natural gas prices at Henry Hub were revised down 6.2 percent to $3.44 per million BTU for 2026, driven by reduced LNG feedgas demand and robust production. US LNG exports in the third quarter are forecast to average 16.5 billion cubic feet per day, slightly lower than the July estimate due to ongoing maintenance at Freeport LNG.
The EIA said it expects most Middle East crude oil production to return to near pre-conflict averages in early 2027, with the Brent spot price gradually falling to an average of $69 per barrel next year. However, the agency warned that ongoing disruptions of about 0.6 million bpd could continue through the end of 2027.
Sources: US Energy Information Administration August 2026 Short-Term Energy Outlook; IndexBox; Mansfield Energy
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