The EIA’s latest outlook points to a more prolonged disruption to Middle East oil markets, with the agency now pushing its expected return to pre-conflict production and trade patterns into early 2027. The shift, which comes a full quarter later than assumed in July, drives revisions across much of the agency’s latest forecast. The EIA released its August Short-Term Energy Outlook on August 11, based on forecasts completed August 6.
The most significant revisions affecting global oil balances were to the supply side. The EIA revised global balances down every quarter from 3Q26 through 4Q27 in this report. The agency now expects global oil inventories to draw by 3.8 MMBbl/d in 3Q26, compared with a 2.2 MMBbl/d draw forecast last month. They also shifted their 4Q26 balance from a 2.7 MMBbl/d build to a 0.6 MMBbl/d draw. The one-quarter delay in trade pattern normalization is what flips 4Q26 from a build to a draw.
Revisions to the demand side were relatively minor. The agency revised global oil demand 0.04 MMBbl/d lower this month, to 102.74 MMBbl/d, and expects demand to rebound to an average of 104.96 MMBbl/d next year.
Regarding balances next year, the EIA still expects a sizable surplus to emerge. However, they revised their 2027 global oil balance lower by roughly 0.3 MMBbl/d. This is down from roughly 5.0 MMBbl/d of oversupply estimated last month to 4.7 MMBbl/d of oversupply estimated this month. Lingering disruptions caused by the closure of the Strait of Hormuz are assumed to continue through the end of their forecast period.
With normalization of Middle East flows being pushed back, the EIA revised its WTI price outlook higher. The agency expects WTI spot prices to average $81.13/Bbl in 3Q26, up from $71/Bbl last month, while the 4Q26 forecast was raised from $66/Bbl to $74/Bbl. They also revised the 2027 price outlook from $60.76/Bbl to $65.39/Bbl.
The August outlook points to tighter global oil balances through the remainder of 2026 and into early 2027 as Middle East supply recovers more slowly than previously expected. Still, EIA expects most shut-in production to return in 1Q27, allowing global inventories to rebuild and crude prices to move lower later in the year.