The U.S. Energy Information Administration (EIA) said in a report released Tuesday that global crude oil production is expected to recover to levels recorded before the conflict by the end of 2026.
The agency added that the bulk of production that has been shut in as a result of the war will come back online by the first quarter of 2027. That timeline represents an acceleration compared with earlier projections, which had anticipated that flows through the Strait of Hormuz would not normalize until early next year and that some Middle East output could face multi-year disruption due to the Iran war.
The EIA characterized the recent events as the largest supply disruption on record and said global energy markets continue to adapt. The report noted that attacks on some vessels transiting the Strait of Hormuz are still occurring.
Market participants are preparing for a potential near-term surplus of crude as barrels that were previously held in the Persian Gulf reach buyers. In light of changing supply expectations, the EIA adjusted its Brent crude price forecast to an average of $74 per barrel in the third quarter of 2026 and $65 per barrel in 2027. The agency's prior outlook had called for Brent to average $79 per barrel in 2027.
Brent crude was trading at about $74 per barrel on Tuesday morning.
Context and implications
The EIA report signals a faster-than-expected return of global oil supplies toward pre-conflict volumes. While the agency projects substantial restoration of shut-in capacity by early 2027, the persistence of attacks on shipping lanes underscores that risks to maritime transit remain. The report's downward revision to the 2027 Brent forecast reflects the agency's assessment that supply will be stronger than previously thought as Persian Gulf barrels are released to market.