EIA Hikes 2026 Brent Forecast to $96 Per Barrel Average, Projects $115 Q2 Peak as Hormuz Shut-Ins Hit 9.1 Million BPD in April

The U.S. Energy Information Administration (EIA) released its April 2026 Short-Term Energy Outlook (STEO) on April 15, delivering the most significant upward revision to its crude oil price forecast in years. Brent crude is now projected to average $96 per barrel for 2026, up 22 percent from the agency's March forecast of $78.84 per barrel, driven almost entirely by the effective closure of the Strait of Hormuz since late February.

Brent and WTI Price Projections

The quarterly breakdown reveals the severity of the supply disruption. Brent is forecast to peak at $114.60 per barrel in the second quarter of 2026 before easing to $99.80 in Q3 and $88.00 in Q4 as shut-in production is gradually restored. The agency's 2027 outlook calls for Brent to average $76.09 per barrel, compared with $64.47 in the previous forecast cycle, reflecting a structurally higher pricing baseline even after the crisis abates.

WTI crude was trading near $93 per barrel in mid-April, consistent with the EIA's widened Brent-WTI spread projection of up to $15 per barrel during the peak disruption period. For Canadian producers, WCS prices are also supported by the elevated benchmark environment, providing improved netback revenues even after the differential.

Hormuz Shut-Ins Reach 9.1 Million BPD

The Strait of Hormuz, which the EIA estimates carries nearly 20 percent of global oil supply, has been effectively closed since February 28 following military escalation in the region. Production shut-ins among Persian Gulf nations including Iraq, Saudi Arabia, Kuwait, the UAE, Qatar, and Bahrain averaged 7.5 million barrels per day in March. The EIA now expects that figure to rise to a peak of 9.1 million barrels per day in April before declining gradually as the situation evolves.

The 9.1 million BPD peak shut-in figure rivals the combined output of Saudi Aramco and ExxonMobil combined, underscoring the extraordinary scale of the supply disruption. For context, the OPEC+ decision to hike May output by 206,000 BPD amounts to just 2.3 percent of the volumes currently stranded by the Hormuz closure.

Global Demand Growth Revised Sharply Downward

The EIA revised global oil demand growth for 2026 from 1.2 million BPD to just 0.6 million BPD, reflecting the economic drag of elevated energy prices on consuming nations. Demand is expected to recover to 1.6 million BPD growth in 2027 as prices ease. These demand headwinds are adding complexity to the supply picture: even as producers face sharply reduced export capacity through Hormuz, consumer economies are throttling back.

Record Inventory Draws Expected in Q2

With supply severely constrained and demand still present, the EIA projects global oil inventory draws of 5.1 million barrels per day in Q2 2026. That follows the extraordinary draw of 9.13 million barrels reported for U.S. crude inventories last week, which far exceeded analyst expectations of a 154,000-barrel build. The WTI surge past $93 on that inventory data reflects how quickly physical markets are tightening under the shut-in pressure.

Implications for Canadian Producers

For Canadian upstream producers, the EIA's revised forecast carries a dual message. Higher Brent and WTI benchmarks translate into improved netback revenues, partially offsetting the WCS differential that widened to $16.15 per barrel in April as Trans Mountain absorbed heavy crude from the oil sands. With Brent expected to hold above $99 through Q3, Alberta producers are seeing realized prices well above what was projected at the start of the year, even after applying the differential.

Natural gas prices remain subdued, with the Henry Hub benchmark near $2.65 per thousand cubic feet, as North American gas supply faces less direct disruption from Middle East events. The disconnect between elevated crude prices and weak natural gas prices is creating significant margin variation across integrated producers with mixed upstream portfolios.

Key EIA April 2026 STEO Highlights

• Brent 2026 annual average: $96.00 per barrel (up from $78.84)
• Brent Q2 2026 peak: $114.60 per barrel
• Hormuz shut-in peak: 9.1 million BPD in April 2026
• Global demand growth 2026: 0.6 million BPD (revised from 1.2M)
• Q2 2026 inventory draws: 5.1 million BPD
• Brent 2027 forecast: $76.09 per barrel

The EIA emphasized that escalating attacks on energy infrastructure and uncertainty about the duration of the conflict are driving a sustained geopolitical risk premium into prices throughout the forecast period. The April 2026 STEO represents the agency's starkest forward assessment of the impact of a major chokepoint closure on global energy markets in the modern era.