EIA Lifts 2025 and 2026 Brent Forecasts for 1st Time in 2025

The U.S. Energy Information Administration (EIA) has raised both its 2025 and 2026 average Brent crude oil spot price forecasts in a short term energy outlook (STEO) for the first time in 2025.

In its latest STEO, which was released on October 7, the EIA projected that the Brent crude spot price will average $68.64 per barrel in 2025 and $52.16 per barrel in 2026. The EIA predicted in its October STEO that the Brent spot price will come in at $62.05 per barrel in the fourth quarter of this year, $51.97 per barrel in the first quarter of 2026, $51.67 per barrel in the second quarter, $52.00 per barrel in the third quarter, and $53.00 per barrel in the fourth quarter.

The EIA projected that the Brent spot price would average $67.80 per barrel in 2025 and $51.43 per barrel in 2026 in its September STEO, $67.22 per barrel in 2025 and $51.43 per barrel in 2026 in its August STEO, $68.89 per barrel in 2025 and $58.48 per barrel in 2026 in its July STEO, $65.97 per barrel in 2025 and $59.24 per barrel in 2026 in its June STEO, $65.85 per barrel in 2025 and $59.24 per barrel in 2026 in its May STEO, $67.87 per barrel in 2025 and $61.48 per barrel in 2026 in its April STEO, $74.22 per barrel in 2025 and $68.47 per barrel in 2026 in its March STEO, $74.50 per barrel in 2025 and $66.46 per barrel in 2026 in its February STEO, and $74.31 per barrel in 2025 and $66.46 per barrel in 2026 in its January STEO.

“Brent crude oil spot prices averaged $68 per barrel in September, unchanged from the average in August,” the EIA noted in its October STEO.

“We forecast that growing global oil supply and the transition away from peak summer seasonal demand will lead to significant growth in global oil inventories over the forecast, causing crude oil prices to fall in the coming months,” the EIA warned.

“We forecast that oil prices will fall to an average of $62 per barrel in the fourth quarter of 2025 (4Q25) and $52 per barrel in the first half of 2026 (1H26). We expect inventory builds will average 2.6 million barrels per day (b/d) in 4Q25 and will remain elevated through 2026, putting significant downward pressure on oil prices,” the EIA continued.

“Global oil prices have remained stable in recent months despite global oil inventory builds – which we estimate as the difference between global oil supply and demand – averaging an estimated 1.9 million barrels per day from May through September,” the EIA went on to note in its STEO.

Several factors have likely offset strong growth in supply to keep prices relatively stable, the EIA stated in its latest STEO.

“One likely factor is China’s additions to its oil stockpiles,” the EIA said.

“China does not report data on its oil inventories. However, based on imports, exports, refining data, and oil inventory data from third-party and official sources, we assess that China has accumulated significant oil inventories this year,” it added.

“Because China’s inventory builds have been strategic in nature, they have potentially acted as a source of demand, limiting downward price pressures more than our estimated balances would otherwise suggest,” it noted.

The EIA stated in its October STEO that it is also possible that global oil demand was higher over the summer than it currently estimates.

“The lag in actual oil demand data, particularly outside of the OECD, means that our estimates for global demand for 2Q25 and 3Q25 are still a mix of model results and initial data observations for much of the world,” the EIA highlighted in the STEO.

The EIA went on to note in the STEO that inventory builds in its forecast are significant even with its expectation that OPEC+ will produce below its targets in the coming months.

“Along with strong production growth among non-OPEC countries, the forecast increase in global oil inventories is based on the OPEC+ announcements to increase the group’s oil production,” the EIA said in the STEO.

“OPEC+ began increasing production in April 2025, and for much of this year, the group’s production has been close to its targets. Last month, the group increased production targets through October 2025, but there is uncertainty regarding some members’ ability to reach the targets given near-term limits on spare capacity,” it added.

“We completed modeling and analysis for this forecast before the October 5 OPEC+ announcement that the group would increase production targets for November 2025,” it continued.

The EIA revealed in its October STEO that it forecasts that global oil inventories will increase by an average of 2.1 million barrels per day in 2026, “compared with an average annual increase of 1.9 million barrels per day this year”.

“Inventory builds will be highest in 1Q26, averaging more than 2.7 million barrels per day. Strong inventory builds could fill commercial storage options on land, which would prompt market participants to seek other, more expensive options for storing crude oil, such as floating storage,” it added.

“As a result, some of the crude oil price declines will likely reflect the higher marginal cost of storage. We forecast that inventory builds will moderate later in 2026 due to a combination of higher global oil demand and slightly lower oil production growth, both in response to lower oil prices,” the EIA continued.

The EIA warned in its latest STEO that the pace at which China continues to purchase oil to fill inventory is a key uncertainty in its forecast.

“If China’s builds continue at the pace estimated in recent months, crude oil prices could be higher than in our forecast,” the EIA pointed out.

“However, a slowdown in China’s purchases of oil slated for inventory would likely put downward pressure on oil prices as more oil begins to show up in visible oil inventory data,” it added.

The EIA also warned in its October STEO that other factors also contribute to significant uncertainty in its price forecast.

“Although we do not forecast any major supply disruptions, risks to oil supply remain,” the EIA highlighted in the STEO.

“In addition, ongoing trade negotiations and legal challenges related to tariffs between the United States and its trading partners could affect economic and oil demand growth, with implications for oil prices,” it added.

“Lastly, given the expectations of significant oversupply beginning later this year, OPEC+ could revisit its plans for increased production, easing downward pressure on oil prices,” it continued.

To contact the author, email andreas.exarheas@rigzone.com