- Brent is forecast to average $105/barrel in the fourth quarter, $14 above the EIA’s previous estimate.
- Recovering Middle Eastern exports are not yet enough to rebuild depleted inventories.
- For UK businesses, the warning extends beyond crude prices to diesel, transport costs and the resilience of energy procurement.
The US Energy Information Administration (EIA) has sharply increased its near-term oil price forecast, warning that constrained Middle Eastern exports and depleted inventories will keep markets vulnerable despite a gradual recovery in supply.
In its October outlook, published on 6 October, the agency forecast Brent crude would average $105/barrel during the final quarter of 2026, up from $91 in its previous projection. It expects prices to ease next year, but the anticipated recovery remains dependent on improving export routes and rebuilding stocks.
The revision underscores the distinction between restoring production and restoring a functioning supply chain. More oil becoming available at the wellhead does not necessarily mean refiners can obtain it promptly or economically.
September’s disruption to Saudi Arabia’s East-West pipeline exposed that vulnerability. The route had provided an important alternative to shipments through the Strait of Hormuz, but attacks temporarily interrupted flows. Bloomberg subsequently reported that Saudi Arabia was working towards restarting the pipeline and resuming exports through the Red Sea.
The EIA estimated that Brent averaged $114/barrel in September, $23 higher than in August. It expects approximately 4.5 million barrels/day of Middle Eastern production to remain shut in during the fourth quarter.
Global inventories, meanwhile, are forecast to continue falling, following substantial withdrawals during the summer. The agency cautioned that the conflict would probably produce “more volatility in short-term price movements than our forecast indicates”.
Diesel adds a second layer of exposure
The pressure is not confined to crude. The EIA’s petroleum products assessment points to unusually tight distillate markets, with US East Coast inventories 32% below their five-year seasonal average in September.
It expects stocks to remain substantially below normal through the winter. Limited global availability could make it difficult for importers to replenish inventories, even as crude flows improve.
For UK energy transition businesses, that matters because diesel exposure can sit several steps away from the energy bill: in construction equipment, haulage, installation fleets and contracted logistics. A renewable project may generate electricity without fuel, yet still face higher costs while being built.
The outlook therefore strengthens the case for separating different risks in procurement. Crude prices, refined product availability and transport charges can move differently; a single assumption about “energy prices” may obscure the exposure that actually determines a project’s margin.
It should be noted that the EIA finalised its model inputs on 1 October, meaning it did not incorporate additional supply resulting from the G7 announcement on 2 October.
The projection is a conditional assessment, not a live market price or a comprehensive account of subsequent intervention. Nor should its US fuel forecasts be translated directly into predictions for British household bills. Different markets, contracts and pricing arrangements require separate analysis.
The wider lesson is that energy security depends on more than the volume of fuel theoretically available. Routes, infrastructure and inventories determine whether that supply can reach customers. Electrification can reduce exposure to oil disruption, but its commercial case still needs to withstand the costs and vulnerabilities of delivering the transition itself.
