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Crude Oil Prices Set to Drop to $79/Barrel by 2027: EIA Report

Global crude oil prices are projected to fall to an average of $79 per barrel by 2027, according to the U.S. Energy Information Administration. The decline is attributed to rising oil production in the Middle East, which will ease supply disruptions linked to the Strait of Hormuz. The report also notes that Brent crude peaked at $138 per barrel in April due to the Strait's closure, but prices are expected to ease as supply conditions improve. Additionally, the UAE's exit from OPEC has led to revised estimates of OPEC's spare production capacity, now expected to average 2.5 million barrels per day in 2027.

Key Points: Crude Oil Prices May Fall to $79/Barrel by 2027

  • Brent crude prices expected to average $79/b by 2027
  • Middle East oil production rise key factor
  • Strait of Hormuz disruptions pushed prices to $138/b in April
  • UAE exits OPEC, impacting spare capacity estimates
3 min read

Crude oil prices may fall to USD 79/barrel by 2027: US Energy Administration

US EIA forecasts Brent crude to average $79/barrel by 2027 as Middle East oil production rises, easing supply disruptions from Strait of Hormuz.

"As oil production in the Middle East rises, we expect crude oil prices to fall, dropping to an average of USD 89/b in 4Q26 and USD 79/b in 2027 - U.S. Energy Information Administration"

Washington DC, May 14

Global crude oil prices are expected to decline to an average of USD 79 per barrel by 2027 as oil production in the Middle East gradually rises, according to the latest report by the U.S. Energy Information Administration.

The report stated that Brent crude oil prices, which surged sharply in April due to disruptions linked to the Strait of Hormuz, are expected to ease over the coming quarters as oil supply conditions improve.

"As oil production in the Middle East rises, we expect crude oil prices to fall, dropping to an average of USD 89/b in 4Q26 and USD 79/b in 2027," the report stated.

According to the EIA, Brent crude oil spot prices touched a high of USD 138 per barrel on April 7 and averaged USD 117 per barrel during April.

The report noted that the effective closure of the Strait of Hormuz tightened global oil supplies and pushed oil inventories lower.

"We expect global oil inventories will fall by an average of 8.5 million b/d in the second quarter of 2026 (2Q26), keeping Brent prices around USD 106/b in May and June," the report stated.

The report highlighted that along with crude oil, global liquefied natural gas (LNG) prices also remain elevated due to reduced supply flows through the region.

"Global LNG prices remain elevated as a result of reduced flows through the Strait of Hormuz, with a wide spread between U.S. domestic natural gas prices and international markets," the report stated.

The EIA also highlighted developments in the US LNG sector, noting that US liquefied natural gas export capacity increased by around 0.9 billion cubic feet per day (Bcf/d) in April.

The growth was led by the first shipment from Golden Pass LNG's Train 1 and additional production from Corpus Christi Stage 3.

The report further noted that Corpus Christi Train 6 is expected to start operations in summer 2026, adding another 0.2 Bcf/d of export capacity.

However, the agency said long lead times for developing new export infrastructure are likely to limit faster growth in US LNG exports.

The report also mentioned major developments within OPEC. The United Arab Emirates (UAE) officially exited OPEC effective May 1, 2026, and the latest Short-Term Energy Outlook (STEO) by US EIA has incorporated this change.

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

Because the UAE previously held spare crude oil production capacity, the EIA has revised its estimates for OPEC spare capacity.

The agency now expects OPEC's spare production capacity to average 2.5 million barrels per day in 2027, compared to its earlier forecast of 3.8 million barrels per day.

The report comes amid continued uncertainty in global energy markets due to geopolitical tensions and supply disruptions in the Middle East region.

- ANI

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Reader Comments

M
Michael C
I'll believe it when I see it. Every time the EIA predicts lower prices, something happens—war, sanctions, or a refinery outage. The $79/barrel target for 2027 seems optimistic given the geopolitical mess in the Middle East. Still, the growth in US LNG exports is promising for India's energy security.
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Sneha F
As someone who fills petrol for her scooter every week, this gives me hope! 🛵 But the timeline is too far—we need relief now. Why can't OPEC increase production immediately? Also, India should invest more in renewable energy to reduce our dependence on these volatile markets. Aapna solar and wind capacity is growing but still not enough.
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Rahul R
The Strait of Hormuz closure impacting $138/barrel—that's terrifying for an oil-importing nation like India. We need to build strategic petroleum reserves and accelerate the India-Middle East-Europe corridor. The UAE leaving OPEC could actually help India get better deals if we negotiate directly with them. Let's see how the Modi government handles this.
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Kavya N
I'm skeptical about these long-term forecasts. Remember when they predicted $100/barrel for 2020 and then COVID hit? 😅 The real question is: will Indian petrol pumps actually lower prices if crude drops? Usually the reduction is very slow while increases are instant. The government needs to ensure benefits reach aam aadmi.

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