US EIA: Global oil production to return to pre Iran war levels by the end of this year
The?U.S. Energy Information Administration says that global oil production and trade flows will?rebound completely by the end of the year from the disruptions caused the Iran war. Energy Information Administration?reported on Tuesday.
The EIA reported that Brent crude oil, the global benchmark, will average $74 per barrel on the spot market in the third quarter, down from $85 per barrel on average in June. Last month, the agency forecast Brent prices to 'average over $100 a barrel during the third quarter.
Millions of barrels per day of oil production from the Middle East have been halted by the months-long wartime blockade on the Strait of Hormuz, forcing refiners in Europe and Asia to cut fuel production.
In recent days, vessel traffic through the waterway increased following an initial 'deal' between the U.S. and Iran. The passage through Hormuz may not be completely safe but the EIA's annual oil production forecasts have been raised while oil and motor fuel prices are being lowered.
EIA expects that most of the Middle East oil production previously shut down will re-enter the market by the first quarter 2027. The EIA said that this would increase global oil supply and decrease withdrawals from stocks, which will 'help to keep prices under control, in the months ahead.
The EIA stated that lower crude oil prices would contribute to a decrease in retail gasoline prices in the United States. The EIA now expects that motor fuel prices in the United States will average $3.80 per gallon during the third quarter. This is down from $4.21 per gallon in second quarter.
The knock-on effects from?the Iran War had driven?U.S. The rise in motor fuel prices is a political concern for Donald Trump and the Republican Party as they prepare to face November's midterm elections. (Reporting from Shariq Khan in New York and Scott DiSavino; editing by David Gregorio).
(source: Reuters)
