Summary
- The U.S. Energy Information Administration said the global oil market will normalize by 2027 despite geopolitical risks in the Middle East.
- The EIA said global oil production and trade will recover to prewar levels by late 2026 to early 2027 even if disruptions in the Strait of Hormuz continue.
- The agency said international oil prices could be about $20 a barrel higher than its previous forecast if the closure of the Strait of Hormuz lasts through the end of June.
Forecast Trend Report by Period
The U.S. Energy Information Administration projects the global oil market will normalize by 2027 despite geopolitical risks in the Middle East, though concerns over supply disruptions persist.
Walter Bloomberg reported on May 12 that the EIA expects global oil production and trade flows to recover to prewar levels by late 2026 or early 2027 even if disruptions in the Strait of Hormuz continue.
The agency estimates oil production disruptions related to the Iran war will peak at about 10.8 million barrels a day in May.
It also expects Iran to cut oil production under pressure from the U.S.
The EIA said international oil prices could be about $20 a barrel higher than its earlier forecast if the Strait of Hormuz remains blocked through the end of June. Its previous outlook assumed the waterway would reopen by the end of May.
The Strait of Hormuz is a critical shipping route for global oil flows, with about 20% of the world's supply passing through it.
Markets are watching how prolonged Middle East tensions and the pace of normalization in the strait will affect international oil prices and global supply chains.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.
