Informist, Wednesday, Jul. 9, 2025

MUMBAI – The US Energy Information Administration has raised its forecast for Brent crude oil prices to average $69 per barrel this year from its previous projection of $66 per barrel. The increase in the forecast is driven largely by higher near-term prices due to a more significant geopolitical risk premium from the conflict in West Asia, the agency said in its Short-Term Energy Outlook for July.

The agency has also raised its forecast for Brent crude oil prices in the second half of 2025 by around $5 per barrel to average $66 per barrel. "The potential for supply disruptions has increased and is likely still reflected in a small risk premium on oil prices, which has led us to raise our oil price forecast for 2H25," the EIA said.

However, the agency has lowered the forecast for Brent crude oil price in 2026 to $58 per barrel from $59 per barrel in its previous projection as it expects significant buildup in global oil inventories to put consistent downward pressure on prices. As for West Texas Intermediate crude on the New York Mercantile Exchange, the US energy agency has raised its estimate for 2025 to $65.22 per barrel from $62.33 per barrel. In 2026, the agency expects WTI prices to average $54.82 per barrel compared with its previous estimate of $55.58 per barrel.

Crude oil prices increased for the first time in five months in June, averaging $71 per barrel, primarily due to concerns that oil supplies could be disrupted if the conflict over Iran's nuclear programme escalated. "The potential for higher oil prices over the second half of this year reflects the importance of the Strait of Hormuz to global oil supply. An estimated 20% of global petroleum consumption is shipped through the Strait of Hormuz, and concerns among market participants about its potential closure caused a spike in oil prices and volatility," the agency said.

Global oil inventories rose by around 1.2 million barrels per day in the first half of 2025, and the agency expects inventories to increase by an average of 900,000 barrels per day for the rest of the year. In 2026, it expects global oil inventories to rise by an average 1.1 million barrels per day, significantly higher than its previous projection of a rise of 600,000 barrels per day.

EIA sees the growth in global oil demand at 800,000 barrels per day in 2025 and a growth of 1.1 million barrels per day in 2026, driven almost entirely by demand from non-Organisation for Economic Co-operation and Development countries. Total non-OECD oil demand is expected to grow by 900,000 barrels per day this year and 1 million barrels per day in 2026, while OECD oil demand is seen declining by 100,000 barrels per day in 2025 and largely unchanged in 2026, it said.

The agency expects the consumption of liquid fuels in India to increase by 500,000 barrels per day over the next two years and in China by 400,000 barrels per day through 2026. It expects production of global liquid fuels to rise by 1.8 million barrels per day in 2025, before rising by another 1.1 million barrels per day in 2026. The agency still expects the growth in liquid fuels production to be led by countries outside the Organization of the Petroleum Exporting Countries and its allies such as the US, Brazil, Canada, and Guyana.

US crude oil production in 2025 is seen lower at 13.37 million barrels per day, compared to 13.42 million barrels per day projected last month. In 2026, production by the world's biggest oil producer is seen at 13.37 million barrels per day, unchanged from the previous forecast, the report said.

At 1049 IST, the price of Brent Crude on the Intercontinental Exchange was $69.95 per barrel and the price of WTI crude on NYMEX was $68.12 per barrel. End

US$1 = INR 85.81

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Ashutosh Pati

Edited by Ashish Shirke

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