Crude oil prices may ease to $79 a barrel by 2027 as Middle East output rises: EIA – Firstpost

Global crude oil prices are likely to decline steadily over the next two years, with benchmark Brent crude expected to average USD 79 per barrel in 2027 as oil production in the West Asia gradually recovers, according to the latest outlook from the US Energy Information Administration (EIA).

The agency said crude prices, which surged sharply earlier this year following disruptions around the Strait of Hormuz, are expected to moderate as supply conditions improve and production volumes increase across key oil-producing regions.

“As oil production in the Middle East rises, we expect crude oil prices to fall, dropping to an average of USD 89/b in the fourth quarter of 2026 and USD 79/b in 2027,” the report said.

Brent crude prices witnessed extreme volatility in recent months. According to the EIA, Brent spot prices climbed to as high as USD 138 per barrel on April 7 and averaged USD 117 per barrel during April after disruptions linked to the effective closure of the Strait of Hormuz tightened global supplies and lowered inventories.

The report noted that shrinking inventories reflected the strain on energy markets during the disruption period. However, easing supply pressures and additional output are expected to reverse some of that tightness over the coming quarters.

The EIA also highlighted structural changes within the oil market, including shifts within the oil producers’ alliance. The report incorporated the exit of the United Arab Emirates from OPEC, effective May 1, 2026.

“OPEC production numbers in this outlook exclude data from the UAE, both for historical and forecast periods,” the agency said.

The departure of the UAE has also altered estimates of OPEC’s spare production capacity. Since the UAE had maintained excess crude production capability, the EIA revised down its forecast for the group’s spare capacity.

It now expects OPEC’s spare oil production capacity to average 2.5 million barrels per day in 2027, lower than its previous estimate of 3.8 million barrels per day.

The report comes at a time of heightened uncertainty across global energy markets, with geopolitical tensions in the Middle East continuing to influence prices and supply expectations. While the EIA expects crude prices to soften over the medium term, future market movements are likely to remain closely tied to regional stability and production dynamics.