EIA Sees Brent Near $100 as Middle East Supply Stays Tight

By Elena Vasquez

With Middle East shut-ins averaging 2.5 million b/d in October and tanker traffic through the Strait of Hormuz still constrained, EIA expects Brent to average about $100/bbl in November and December. In its November Short-Term Energy Outlook, the agency said global crude prices would remain “near $100/bbl through yearend 2026” before easing gradually in 2027.

What is keeping crude near $100?

The agency expects “disruptions to remain near 2.5 million b/d through fourth-quarter 2026,” then ease to 1.9 million b/d in first-half 2027 and 1.3 million b/d in second-half, against a May peak of 10.9 million b/d.

The forecast treats pipeline logistics as part of supply recovery. Citing Vortexa vessel-tracking data, EIA said Middle East exports rose slightly in October after Saudi Arabia restarted its East-West Pipeline. Continued shipments through the Strait of Hormuz and ship-to-ship transfers along Oman's coast also helped ease constraints.

Brent averaged $124/bbl in October, $10/bbl above September and the highest monthly average since July 2022 on an inflation-adjusted basis. EIA attributed a third consecutive monthly increase to declining inventories, tanker attacks in the Middle East and Black Sea, and higher shipping costs that disrupted oil flows. Brent fell below $100/bbl on Nov. 4.

EIA's projected 2026 average is $97/bbl. It expects $86/bbl in 2027 and $77/bbl by fourth-quarter 2027 as production returns and global inventories rebuild.

Takeaway: The near-term crude balance depends on restoring shut-in barrels and keeping constrained shipping lanes open.

Can supply rebuild fast enough?

EIA assumes most Middle East production outside Iran will return to pre-conflict levels by mid-2027, supported by pipeline bypass routes, ship-to-ship transfers and additional pipeline capacity in the United Arab Emirates. Iranian exports remain constrained throughout the forecast period.

Global oil inventories declined by an estimated 1.2 million b/d in third-quarter 2026, but EIA expects rebuilding to begin in fourth-quarter. Stock builds are projected to accelerate to an average 3.5 million b/d in first-half 2027, which the agency links to Brent falling below $90/bbl in second-quarter 2027.

Global liquid fuels production is forecast to rebound to 108.4 million b/d in 2027 from 101.7 million b/d in 2026. OPEC liquid fuels production is expected to rise to 28.4 million b/d from 24.5 million b/d over the same period.

EIA said prolonged supply disruptions and elevated prices weakened oil consumption, particularly in China and the Middle East. It estimates global liquid fuels consumption will decline by 2.0 million b/d in 2026 before recovering by 2.0 million b/d in 2027 as supply flows improve and prices ease.

Takeaway: EIA's 2027 easing case depends on production returning quickly enough for inventories to rebuild.

What does the US crude and refining picture show?

EIA expects US crude production to average a record 13.9 million b/d in 2026 and 14.3 million b/d in 2027, compared with 13.7 million b/d in 2025.

US commercial crude inventories fell 14.1 million bbl in October to about 410 million bbl, the lowest end-of-October level since 2014. EIA attributes the decline to strong US refinery demand and a wide Brent-West Texas Intermediate differential that encouraged exports and discouraged imports.

Inventories should remain below their five-year average through mid-2027 before increasing to about 444 million bbl by year-end as domestic production rises and net imports recover. EIA expects refining margins to remain elevated through much of 2027 because of continued disruptions to global petroleum-product supplies.

The agency raised its 2027 average US retail diesel forecast by 12% from the October outlook to $5.03/gal. It increased its gasoline forecast nearly 5% to $3.73/gal.

Takeaway: US crude output reaches records while refinery economics remain supported by constrained product supply.

Why are US gas prices and LNG exports moving apart?

A warmer-than-expected start to the winter heating season and continued production growth are pressuring US natural gas prices, according to EIA. Henry Hub spot prices are forecast to average $2.87/MMbtu from November through March, 16% below the previous outlook and 36% below last winter.

Working natural gas inventories are expected to reach 3,840 bcf at the end of November, 67 bcf above EIA's October forecast. Henry Hub prices are forecast to average $3.37/MMbtu in 2026 and decline to $2.88/MMbtu in 2027 as production growth outpaces increases in domestic consumption and exports.

US marketed natural gas production is expected to rise from 118.4 bcfd in 2025 to 124.4 bcfd in 2026 and 129.4 bcfd in 2027. EIA attributes that growth to continued expansion in the Permian and Haynesville regions.

Elevated international gas prices support US LNG exports. European and Asian benchmark gas futures averaged more than $28/MMbtu in October, their highest level since December 2022, as tanker attacks and shipping disruptions constrained LNG shipments through the Strait of Hormuz.

US LNG gross exports are forecast to increase from 15.1 bcfd in 2025 to 17.6 bcfd in 2026 and 19.0 bcfd in 2027 as new liquefaction capacity ramps up and existing plants expand.

Takeaway: EIA expects lower Henry Hub prices alongside rising US LNG export volumes through 2027.

What should the desk watch?

The next checkpoint is whether global inventories actually begin rebuilding in fourth-quarter 2026, as EIA expects, while Middle East shut-ins remain near 2.5 million b/d. Another is the agency's mid-2027 assumption that production outside Iran returns to pre-conflict levels, with Iranian exports still constrained.

EIA links that balance to Brent moving from near $100 toward sub-$90 pricing in second-quarter 2027. The margin watch is equally direct: the agency expects US refining margins to remain elevated through much of 2027 while global petroleum-product supplies stay disrupted.

Watch item: The fourth-quarter inventory build, the pace of Middle East shut-in unwinding and whether refining margins stay elevated as EIA expects.