EIA Sees Smaller Oil Crunch in 2026
by Andreas Exarheas | Rigzone Staff
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*this article was not written by Roseland Oil & Gas
The U.S. Energy Information Administration tightened its oil crunch prediction for 2026 in its latest short term energy outlook.
The U.S. Energy Information Administration (EIA) tightened its oil crunch prediction for 2026 in its latest short term energy outlook (STEO).
According to its October STEO, released earlier this month, the EIA now sees world petroleum and other liquids demand outweighing production by 1.34 million barrels per day this year. In its previous STEO, which was released in September, the EIA saw demand outweighing production by 1.97 million barrels per day.
World petroleum and other liquid fuels demand is projected to average 102.43 million barrels per day in 2026 and production is expected to come in at 101.09 million barrels per day this year, the EIA’s latest STEO outlined.
The EIA’s October STEO highlighted that the OECD is expected to contribute 45.68 million barrels per day of demand and non-OECD countries are expected to contribute 56.75 million barrels per day of consumption this year. Production for 2026 is split into 75.40 million barrels per day of crude oil, and 25.69 million barrels per day of other liquids, the STEO showed.
A quarterly breakdown included in the EIA’s latest STEO projected that the oil crunch will average 0.69 million barrels per day in the fourth quarter of this year. This marks a tightening from the third quarter, when it came in at 1.87 million barrels per day, which itself marked a tightening from the second quarter, when it averaged 3.55 million barrels per day, the EIA’s October STEO outlined. In the first quarter of 2026, the oil market was in a glut, whereby production outweighed demand by 0.79 million barrels per day, according to the EIA’s latest STEO.
This STEO showed an oil market glut of 1.89 million barrels per day for 2025. Production averaged 106.29 million barrels per day and demand came in at 104.40 million barrels per day last year, the STEO outlined.
In its previous STEO, the EIA expected world petroleum and other liquid fuels demand to average 102.59 million barrels per day in 2026 and production to average 100.62 million barrels per day this year.
That STEO saw the OECD contributing 45.69 million barrels per day of demand and non-OECD countries contributing 56.90 million barrels per day of consumption this year. Production for 2026 was split into 74.78 million barrels per day of crude oil, and 25.85 million barrels per day of other liquids, in that STEO.
A quarterly breakdown included in the EIA’s September STEO projected that the oil crunch would average 1.71 million barrels per day in the fourth quarter of this year and 2.96 million barrels per day in the third quarter. This STEO showed an oil crunch of 3.86 million barrels per day for the second quarter of this year and a glut of 0.71 million barrels per day in the first quarter.
The EIA’s September STEO showed an oil market glut of 1.96 million barrels per day for 2025. In that STEO, the EIA showed that production averaged 106.24 million barrels per day last year and demand averaged 104.28 million barrels per day in 2025.
2027
The EIA’s October STEO slightly loosened the organization’s oil glut projection for 2027, compared to its previous STEO.
In its latest STEO, the EIA projected that production will outweigh demand by 4.91 million barrels per day next year. This STEO sees production averaging 109.55 million barrels per day in 2027 and demand coming in at 104.64 million barrels per day.
The EIA’s previous September STEO projected that production would outweigh demand by 4.90 million barrels per day in 2027. That STEO saw output averaging 109.88 million barrels per day and demand averaging 104.98 million barrels per day next year.
The EIA’s latest STEO highlighted that the OECD is expected to contribute 46.17 million barrels per day of demand and non-OECD countries are expected to contribute 58.48 million barrels per day of consumption in 2027. Production for 2027 is split into 81.50 million barrels per day of crude oil, and 28.05 million barrels per day of other liquids, the October STEO showed.
A quarterly breakdown included in the EIA’s latest STEO projected that the oil glut will average 3.03 million barrels per day in the first quarter of next year, 4.95 million barrels per day in the second quarter, 5.38 million barrels per day in the third quarter, and 6.23 million barrels per day in the fourth quarter.
In its previous STEO, the EIA expected world petroleum and other liquid fuels demand to average 104.98 million barrels per day in 2027 and production to average 109.88 million barrels per day next year.
That STEO saw the OECD contributing 46.16 million barrels per day of demand and non-OECD countries contributing 58.83 million barrels per day of consumption in 2027. Production for 2027 was split into 81.47 million barrels per day of crude oil, and 28.41 million barrels per day of other liquids, in that STEO.
A quarterly breakdown included in the EIA’s September STEO projected that the oil glut would average 3.01 million barrels per day in the first quarter of next year, 5.05 million barrels per day in the second quarter, 5.23 million barrels per day in the third quarter, and 6.25 million barrels per day in the fourth quarter.
Oil Price
In its latest STEO, the EIA revealed that it was forecasting that the Brent crude oil spot price will average $105 per barrel in the fourth quarter of 2026, which it pointed out was $14 per barrel higher than last month’s STEO.
“We assume that oil flows from the Middle East remain constrained through 4Q26, leading to shut-in production averaging 4.5 million barrels per day during that quarter,” the EIA noted in its October STEO.
“With export routes still constrained, the attacks on the East-West pipeline highlight the potential for continued volatility in physical oil flows and oil prices amid ongoing withdrawals from oil inventories,” it added.
“With continued disruptions of crude oil production and high transportation costs and risk premiums, we forecast that oil prices will remain elevated until constraints on oil flows from the Middle East resolve and oil inventories can be replenished,” it continued.
The EIA highlighted in its STEO that it estimated that global oil inventories fell by an average of 1.9 million barrels per day in the third quarter of 2026 and will fall an additional 0.7 million barrels per day on average in the fourth quarter.
In its October STEO, the EIA went on to note that, although it raised its crude oil price forecast from last month, it still expects oil prices “will generally fall from their early October average”.
“We assume that the combination of workarounds to export oil from the Middle East (such as pipeline and overland bypass routes, the use of ship-to-ship transfers, and new bypass pipeline capacity expected to come online in 2027 in the United Arab Emirates) will help shut-in volumes gradually fall through the STEO forecast period,” the EIA said.
“We expect the majority of production in the region to return to pre-conflict averages by the end of 2Q27, and we forecast the Brent spot price decreases to an average of $87 per barrel by 2Q27,” it added.
“As depleted global oil inventories build throughout next year, oil prices gradually fall to an average of $74 per barrel in 4Q27,” it continued.
“However, we expect the conflict in the Middle East will lead to continued volatility in crude oil flows both through the Strait of Hormuz and through alternative routes, which will likely lead to more volatility in short-term price movements than our forecast indicates,” it went on to warn.
by Andreas Exarheas | Rigzone Staff
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas