Market Speaks: EIA expects crude oil prices to spike before cooling in 2027

In its latest monthly oil report released yesterday, the U.S. Energy Information Administration highlighted that global oil markets have entered a phase of heightened volatility, driven by geopolitical tensions disrupting flows through the Strait of Hormuz. Brent crude averaged $103 per barrel in March and is projected to surge to a peak of $115 in Q2 2026, supported by supply disruptions and a persistent war-driven risk premium. However, prices are expected to gradually ease, falling below $90 by late 2026 and averaging $76 in 2027 as production outages subside. The Brent-WTI spread widened to $12 per barrel in March and is forecast to peak near $15, reflecting higher shipping costs and constrained Middle East supply impacting Brent more sharply. The spread is expected to narrow as oil flows normalize. Overall, the report underscores that oil prices will remain elevated and volatile in the near term, with the outlook heavily dependent on the duration of the conflict and the scale of supply disruptions.

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