• The U.S. Energy Information Administration now expects global oil production and flows to return to near pre-war levels by late 2026, earlier than previously forecast.
  • Most shut-in output is expected back by Q1 2027, prompting the EIA to lower its 2027 Brent crude forecast to $65 a barrel.
  • The revised outlook signals a faster-than-expected supply rebound, which could ease inflationary pressures and reduce volatility in energy markets.

Faster Recovery Ahead

The U.S. Energy Information Administration has revised its outlook, projecting that global oil production and flows will recover to near pre-war levels by late 2026 — earlier than its prior forecasts. According to the agency's latest Short-Term Energy Outlook, most production that was shut in due to geopolitical disruptions is now expected to return by the first quarter of 2027.

"We're seeing a more robust supply response globally," an EIA official told Reuters, speaking on condition of anonymity. The agency cited stronger-than-expected output from non-OPEC+ producers and improving logistics as key drivers.

Brent Forecast Slashed

As a result of the improved supply outlook, the EIA lowered its Brent crude price forecast for 2027 to around $65 per barrel, down from earlier estimates. The revision reflects expectations that inventories will rebuild faster and that the market will achieve a more comfortable balance over the medium term.

"The new forecast suggests that the worst of the supply crisis is behind us," said an energy analyst not involved in the EIA's projections. "If these trends hold, we could see sustained lower prices, which would be a boon for consumers and energy-intensive industries."

Market Implications

The EIA's update comes as oil markets have already begun to price in a softer trajectory, with Brent crude trading near $73 on Friday. Analysts note that the agency's outlook could further dampen near-term price spikes, though geopolitical risks remain.

A return to pre-war production levels would mark a significant milestone for global energy markets, potentially easing inflation and reducing volatility. However, the EIA cautioned that the path to normalization depends on continued investment and stable policies.

"We've attempted to reach out to OPEC+ officials for comment but have not yet received a response," the article notes.

Correction: An earlier version of this article misstated the EIA's previous Brent forecast for 2027. The correct figure is $65 per barrel.