EIA September Outlook: Brent Seen at $91 in 2026 as Middle East Disruptions Lift Diesel Prices

Middle East shipping disruptions have transformed the EIA’s 2026 oil outlook from one of easing prices into one of prolonged physical-market tightness. The agency’s September Short-Term Energy Outlook (STEO) puts average Brent crude at roughly $91 per barrel for 2026 and forecasts U.S. retail diesel at $5.07 per gallon, a 22-cent increase from its previous diesel forecast. 38

The EIA’s price outlook: high in 2026, lower in 2027

For the second half of 2026, EIA expects Brent to average around $90 per barrel. It then forecasts an average of $74 per barrel in 2027, assuming oil production increases and global inventories begin rebuilding. The agency’s 2027 retail-diesel forecast is $4.40 per gallon, also above its prior estimate of $4.07. 313

That projected decline is a conditional baseline, not a prediction of an immediate return to normal. It depends on a meaningful recovery in production and on the restoration of trade flows that have been impaired by the regional conflict.

Why disruptions are lifting oil and diesel prices

The core problem is not simply reduced production capacity. It is the difficulty of moving crude and refined products safely from producers to buyers.

The Strait of Hormuz is the principal export route for much of the Gulf. EIA estimated that crude oil and petroleum-liquids flows through the strait averaged 4.9 million barrels per day in the second quarter of 2026, compared with 21.6 million b/d in the fourth quarter of 2025 before the conflict. 216

When exports cannot move, producers may be forced to curb output because storage, pipelines and alternative terminals cannot fully absorb the displaced supply. EIA previously estimated Middle East shut-ins averaged 8.3 million b/d in June, after reaching 11.2 million b/d in May. More recently, Reuters reported EIA’s estimate that shut-ins rose to 6.7 million b/d in August, from 5 million b/d in July. 68

The disruption has also complicated Saudi Arabia’s use of its Red Sea export option. Saudi crude exports had been rerouted toward Yanbu after the Hormuz crisis, but crude and condensate flows through the Bab el-Mandeb Strait fell to 1.5 million b/d in August, from 3.14 million b/d in July and 5.9 million b/d in June, according to S&P Global Commodities at Sea data.

Together, the two chokepoints limit the ability to replace one disrupted route with another. That raises freight, insurance and availability risks for refiners, especially those dependent on Middle Eastern grades.

Inventory draws are supporting the price forecast

EIA’s higher forecast is tied to a rapid drawdown in global oil inventories. Reporting on the September outlook said global inventories had fallen by an estimated 400 million barrels during 2026 through August, with further draws expected by year-end. 11

Inventories act as a buffer between disrupted supply and consumption. As that buffer shrinks, buyers compete more aggressively for deliverable barrels, and the market becomes more sensitive to any new interruption in shipping or production.

This is also why the effects extend beyond crude. Less available crude can constrain refinery operations and reduce the supply of diesel and other refined products. The EIA’s higher retail-diesel forecast reflects that broader strain on the fuel system, not just the benchmark crude-price increase. 313

Asia faces the sharpest physical-supply pressure

Asian refiners are particularly exposed because Middle Eastern crude is a major source of regional supply. S&P Global reported that ship crossings through Hormuz had fallen by more than 80% from prewar conditions, while Southeast Asia’s distillate imports in August were roughly 20% below prewar levels.

The result is a tighter market for specific crude grades and refined products, rather than a uniform shortage of every barrel worldwide. Refiners that need replacement cargoes may face higher physical premiums and shipping costs, while lower refinery runs can also suppress near-term oil demand.

Wood Mackenzie estimates that extending the conflict through year-end would reduce global crude runs by 1.4 million b/d in the fourth quarter of 2026, led by Asia. It also expects Asia-Pacific oil demand to return to pre-conflict levels only in late 2027 under that scenario.

When could production and trade normalize?

Recovery is likely to be gradual even if shipping conditions improve. Earlier EIA analysis assumed that most pre-conflict production and trade patterns could return in late 2026 or early 2027 once Hormuz flows resumed. 5

But the September environment is more challenging. Reuters reported that the EIA expected some Middle East producers to struggle to restore output to pre-conflict levels even by the end of 2027. 17

S&P Global’s more cautious case assumes that, without a decisive end to the conflict, normalized Hormuz traffic and the removal of Red Sea risks, Middle Eastern crude and condensate exports could remain below prewar levels through 2027. Its cited range is roughly 10 million to 16 million b/d per month, compared with about 20 million b/d in January and February 2026.

What to watch through 2027

The EIA forecast points to two distinct paths:

• Baseline recovery: Hormuz traffic gradually improves, alternative export routes continue operating, production rises and inventories rebuild. Under this scenario, Brent falls toward EIA’s $74-per-barrel 2027 average. 3
• Extended disruption: Attacks or restrictions keep Hormuz and Bab el-Mandeb constrained, sustaining shut-ins and limiting Saudi Arabia’s Red Sea export flexibility. That would deepen inventory draws and leave crude and diesel prices above the EIA baseline. 8

For oil buyers, refiners and diesel consumers, the decisive signal is not only the headline Brent price. It is whether tanker traffic can resume safely and consistently through both maritime chokepoints. A sustained normalization would unlock supply and reduce the physical-market premium; another interruption would keep the market tight well into 2027.