output and trade
flows should rebound fully by the end of this year from the
disruptions caused by the Iran war, the U.S. Energy Information
Administration said on Tuesday.
Global benchmark Brent crude oil prices will average around
$74 a barrel in the spot market during the third quarter of this
year, down from an average of $85 in June, the EIA said. The
agency had last month forecast Brent prices would average over
$101 a barrel in the third quarter.
The months-long blockade of the Strait of Hormuz in the war
has shut in millions of barrels of daily oil production from
across West Asia, forcing refiners from Europe to Asia to
reduce fuel output.
Vessel movement through the waterway has risen in recent
days following a preliminary deal between the U.S. and Iran.
Although passage through Hormuz is not yet totally safe, the EIA
has raised its annual oil production expectations while lowering
its oil and motor fuel price forecasts.
The EIA said it expects most of the oil output previously
shut-in across the Middle East to return online by the first
quarter of 2027. That will lift global supply and reduce
withdrawals from stockpiles, which should help keep prices under
control in the months ahead, the agency said.
Lower crude oil prices will contribute to a drop in U.S.
retail gasoline prices, the EIA said. The agency now expects
U.S. motor fuel prices will average about $3.80 a gallon in the
third quarter, down from $4.21 a gallon in the second quarter.
Knock-on effects of the Iran war had pushed U.S. motor fuel
prices to multi-year highs, posing a major political worry for
President Donald Trump and his Republican Party ahead of
November’s midterms.