EIA Forecasts Record Low Oil Inventories Through 2026

The U.S. Energy Information Administration projects that oil inventories among OECD member nations will fall to their lowest levels since 2003 by December 2026. Stockpiles are expected to drop below 2.3 billion barrels as countries draw from emergency reserves to offset a loss of approximately 11 million barrels per day of Middle Eastern output resulting from the war involving Iran.

Despite a current ceasefire and a halt in attacks between Iran and Israel following an appeal from President Donald Trump, the agency reports that the Strait of Hormuz remains effectively closed. Marine traffic is unlikely to return to pre-conflict levels until early 2027. This disruption has driven Brent spot-market averages to an estimated $105 a barrel for June and July, though prices dipped roughly 5% on Tuesday following the ceasefire news.

To mitigate the shortfall, U.S. net exports of crude oil and petroleum products reached a record 5.8 million barrels per day in April. However, the combination of high fuel prices and government conservation efforts is expected to cause the first worldwide consumption drop since 2020, with demand forecast to shrink by 1.1 million barrels per day in 2026. The agency anticipates a demand rebound of 2.5 million barrels per day in 2027 as production resumes and prices stabilize.