A memorandum of understanding signed by the U.S. and Iran on June 18 shifted expectations in the Energy Information Administration’s short-term outlook.
EIA forecasted lower fuel and crude oil prices, along with increased global oil production, in its July release.
A return to pre-conflict flows through the Strait of Hormuz was also expected, according to the EIA report completed on July 1.
“More oil production and the reestablishment of trade flows will result in less oil being taken out of inventory in the coming months than we previously forecast,” EIA said. Next year, we expect that rising oil production will result in the market shifting back to the pre-conflict state of oversupply.”
However, just days after EIA updated its forecast, the U.S.-Iran truce has reportedly ended, driving oil prices higher and renewing concerns of another surge in fuel prices.
The price per barrel of U.S. crude oil saw the largest one-day increase since the beginning of June on Wednesday, July 8.
Traffic through the Strait of Hormuz was at a near standstill, following renewed airstrikes in the region.
The full short-term energy outlook is available on the EIA website.
U.S. exports of crude #oil and #petroleum products reached record in April. #TodayInEnergy https://t.co/Jej5EbGo5W pic.twitter.com/0daVtJQboU
— EIA (@EIAgov) July 9, 2026
In its weekly fuel report released on July 6, EIA said the national average price per gallon of diesel was $4.578, down 9 cents from the previous week.
Regionally, fuel prices were also down, led by a 12.5-cent decline in the Midwest.
EIA forecasts a national diesel average of $4.64 per gallon for the third quarter. By the end of this year, that average is expected to decline to $4.39 per gallon and dip below $4 per gallon in the second half of 2027, according to the July EIA outlook.
The EIA is scheduled to release an update to its short-term energy outlook in early August. LL
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