The US Energy Information Administration (EIA) said Tuesday that it expects oil shipments through the Strait of Hormuz to resume in the third quarter of 2026, but traffic through the key energy chokepoint is not expected to return to pre-conflict levels until early 2027.
In its June Short-Term Energy Outlook, the agency said it assumes the Strait of Hormuz will remain effectively closed in the near term.
Oil shipments through the strait are forecast to resume in the third quarter, but the agency said it would likely take several months for traffic to ramp up to levels seen before the conflict.
The EIA also said some oil production in the Middle East is expected to remain disrupted beyond its short-term forecast period.
The Strait of Hormuz is one of the world's most critical energy transit routes, carrying a major share of global crude oil and liquefied natural gas shipments from Gulf producers to international markets.
The agency said global oil markets remain highly volatile as very limited shipping traffic through the strait has forced Middle Eastern producers to reduce crude output by more than 11 million barrels per day in May compared with pre-conflict levels.
The production decline has led to large global inventory draws to meet demand, according to the EIA.
Under its assumptions, global oil inventories are expected to fall by an average of 6.3 million barrels per day in the second quarter of 2026 and by 7.6 million barrels per day in the third quarter.
The agency forecast that oil inventories in OECD countries would fall to their lowest levels since 2003.
The EIA also cut its global oil demand outlook, now expecting consumption to decline by 1.1 million barrels per day in 2026 compared with 2025, reflecting high fuel prices, reduced fuel availability, and government initiatives.
In its May outlook, the agency had expected global oil demand to rise by 0.2 million barrels per day this year.
Demand is forecast to rebound in 2027, rising by 2.5 million barrels per day to 105.3 million barrels per day as supply flows return later in 2026.
Despite production outages and lower inventories, the EIA said Brent crude prices fell in May due to weaker demand and reports of a possible agreement between the US and Iran.
However, the agency expects Brent to average $105 per barrel in June and July, assuming the Strait of Hormuz remains closed to most shipping traffic in the near term.
Prices are expected to fall to an average of $79 per barrel in 2027 as flows through the strait resume incrementally and producers gradually restore shut-in production.
