The U.S. Energy Information Administration has sharply raised its oil-price forecasts for this year and next as falling global inventories and tight diesel supplies keep energy markets vulnerable to further disruption from the Iran war.
The EIA now expects Brent crude to average about $98 a barrel in 2026, an 8% increase from its previous forecast. The agency expects the global benchmark to average approximately $105 a barrel during the fourth quarter.
The revision reflects continuing disruption to Middle Eastern oil production and transportation following the U.S.-Israeli war with Iran, which has affected flows through the Strait of Hormuz and forced regional producers to rely more heavily on alternative export routes.
Diesel remains an especially important pressure point. U.S. retail diesel prices, which reached record levels in September, are expected to remain elevated before declining as supply conditions improve.
The EIA nevertheless expects conditions to ease gradually as regional exporters increase use of alternative routes and logistical adjustments restore some Gulf exports.
U.S. production provides another potential buffer, but the latest forecast shows that the global market remains unusually exposed to further disruptions.
For investors and businesses, the central question is whether recovering Gulf exports can rebuild inventories quickly enough to reduce the geopolitical premium embedded in crude and refined-fuel prices.
Until that happens, energy costs remain a significant inflation and economic-growth risk heading into the final months of 2026.
