The U.S. Energy Information Administration (EIA) has significantly revised its forecasts for global oil supply disruptions stemming from the ongoing Iran war, acknowledging that the impact on energy markets is far more severe and prolonged than previously anticipated, according to a report published May 13, 2026, by Reuters via EnergyNow. The agency now estimates that approximately 10.5 million barrels per day of oil output was shut in across the Middle East in April, a figure expected to rise to a peak of 10.8 million barrels per day in May as Middle Eastern storage facilities approach maximum capacity.
This represents a substantial upward revision from the EIA's earlier forecast, which had projected production losses peaking at 9.1 million barrels per day in April. A key driver of the worsening outlook is Iran's blockade of the Strait of Hormuz, which continues to remove millions of barrels of global oil supply from markets daily. The EIA now assumes the Strait will remain effectively closed through the end of May, extending its prior assumption that the closure would last only through April.
Additionally, the agency expects Iran will be forced to cut its own oil output due to the U.S. blockade of the country's exports through the Strait. The revised supply figures translate into significantly larger draws on global oil stockpiles. The EIA now forecasts global oil inventories will fall by 2.6 million barrels per day this year, a dramatic increase compared to its earlier estimate of a draw of approximately 300,000 barrels per day.
On price projections, the EIA stated that Brent crude oil prices will average around $106 per barrel in May and June, before declining to average approximately $89 per barrel in the fourth quarter of 2026 as Middle East production begins to recover. The agency also issued a stark warning: if the Strait of Hormuz remains shut through June, one month beyond the current assumption, oil prices could be approximately $20 per barrel higher over the near term compared to current forecasts. The uncertainty surrounding the conflict has been compounded by contradictory signals from U.S.
President Donald Trump, who has alternately suggested the war could end within weeks while also threatening to fight until Tehran is sent back to the "stone ages," making it difficult for energy analysts to predict the duration and depth of market disruptions. Beyond supply, the EIA also cut its global oil demand outlook. Global oil demand growth is now forecast at approximately 200,000 barrels per day for the year, down sharply from last month's projection of 600,000 barrels per day of growth.
The agency attributed the downward revision to the expected demand destruction caused by elevated oil prices. "We expect higher prices will bring about a reduction in oil demand, which will help move the oil market towards balance," the EIA stated in its short-term energy outlook report. "The longer that shut-in production volumes and disruptions to oil flows persist, the larger we expect this price response to be." The impact is being felt directly by American consumers.
The EIA now expects U.S. retail gasoline prices to average $3.88 per gallon this year, approximately 18 cents higher than its prior forecast issued in April. Independent analysts have warned that multi-year-high fuel prices could weigh on demand during the peak summer travel season while also presenting a significant political challenge for the Trump administration ahead of November midterm elections. The EIA report was compiled by Reuters journalists Shariq Khan and Scott DiSavino in New York, with editing by Chizu Nomiyama and Andrea Ricci.
Source: energynow.com