The United States Energy Information Administration (EIA) has released a new outlook indicating that global crude oil prices are likely to decline to an average of $79 per barrel by 2027. This forecast comes as oil production in the Middle East is expected to gradually increase, easing the supply constraints that have driven prices higher in recent months.
Brent crude price forecast
According to the EIA report, Brent crude prices, which surged sharply following disruptions around the strategic Strait of Hormuz, are expected to soften over the coming quarters as supply conditions improve. The agency stated, "As oil production in the Middle East rises, we expect crude oil prices to fall, dropping to an average of $89 per barrel in the fourth quarter of 2026 and $79 per barrel in 2027."
For context, Brent crude spot prices touched $138 per barrel on April 7 and averaged $117 per barrel during April 2026 amid supply disruptions linked to the effective closure of the Strait of Hormuz. The EIA noted that global oil inventories are expected to decline by an average of 8.5 million barrels per day in the second quarter of 2026, keeping Brent prices elevated around $106 per barrel through May and June of that year.
LNG prices remain high
The report also highlighted that global liquefied natural gas (LNG) prices remain elevated due to reduced supply flows through the Strait of Hormuz and the widening gap between US domestic gas prices and international markets. "Global LNG prices remain elevated as a result of reduced flows through the Strait of Hormuz, with a wide spread between U.S. domestic natural gas prices and international markets," the EIA said.
US LNG export capacity growth
On the supply side, the EIA noted developments in the US LNG sector, with American export capacity rising by approximately 0.9 billion cubic feet per day in April 2026. This increase was driven by the first shipment from Golden Pass LNG's Train 1 and additional output from Corpus Christi Stage 3. Furthermore, Corpus Christi Train 6 is expected to begin operations in the summer of 2026, adding another 0.2 billion cubic feet per day of export capacity. However, the agency cautioned that long development timelines for new export infrastructure may limit faster expansion in US LNG exports.
Impact of UAE's exit from OPEC
The report also incorporated changes within the Organization of the Petroleum Exporting Countries (OPEC) after the United Arab Emirates formally exited the oil producers' group from May 1, 2026. "OPEC production numbers in this outlook exclude data from the UAE, both for historical and forecast periods," the report stated. Following the UAE's exit, the EIA revised its estimate for OPEC's spare production capacity, which is now projected to average 2.5 million barrels per day in 2027, lower than the earlier estimate of 3.8 million barrels per day.
Market volatility continues
The report comes amid continued volatility in global energy markets due to geopolitical tensions and supply disruptions in the Middle East. The EIA's outlook provides a comprehensive view of the factors shaping crude oil and LNG prices in the coming years.
