Disruptions to Middle Eastern oil flows continue. The fallout is reflected across fuel and energy markets.
Ceasefire talks between the U.S. and Iran have reportedly stalled as of Wednesday, May 13.
Assuming a later opening to the Strait of Hormuz than its previous report, the U.S. Energy Information Administration said in its May short-term energy outlook that oil shipments are unlikely to reach pre-conflict levels until later this year.
Additionally, the United Arab Emirates announced it would depart OPEC, effective May 1. The departure of the UAE will result in a decline of more than 1 million barrels per day in OPEC’s spare capacity.
Disrupted production leads to large oil inventory draws, particularly in May and June, limiting downward pressure on oil prices even after flows through the strait rise, EIA said.
In April, Brent crude oil prices were as high as $138 per barrel, averaging $117 per barrel for the month.
The latest EIA fuel report showed a national average diesel price of $5.639 per gallon.
U.S. average retail prices for May 12, 2026:
⛽️Regular grade #gasoline: $4.50/gallon
⛽️On-highway #diesel: $5.64/gallon#gaspricesHistorical data are available on our website: https://t.co/ca3E8ZLEfO
— EIA (@EIAgov) May 12, 2026
“The timing of resumed oil flows through the Strait of Hormuz and the subsequent rate at which Middle Eastern producers restore output are key factors influencing EIA’s price forecast through year-end,” EIA Administrator Tristan Abbey said. “Our new datasets tracking global strategic stocks and shipping chokepoints for petroleum and gas markets will offer timely context and additional depth.”
Residential electricity prices are expected to increase by 5% in 2026, according to the EIA outlook. The largest increases are likely on the East Coast.
U.S. propane inventories are forecasted to remain above average throughout 2026, peaking in October.
Natural gas production is also expected to rise through 2027, with higher crude oil prices supporting more crude oil production, EIA said.
| Notable Forecast Changes |
2026 |
2027 |
|
| Global oil inventory change (million barrels per day) | -2.6 |
3.9 |
|
| Previous forecast | -0.3 |
3.3 |
|
| Change | -2.3 |
0.5 |
|
| OPEC surplus production capacity (million barrels per day) | 0.5 |
2.5 |
|
| Previous forecast | 1.2 |
3.8 |
|
| Change | -0.6 |
-0.4 |
|
| Henry Hub spot price (dollars per million British thermal units) | $3.50 |
$3.18 |
|
| Previous forecast | $3.67 |
$3.59 |
|
| Percentage change | -4.4% |
-11.5% |
|
| U.S. marketed natural gas production (billion cubic feet per day) | 121.8 |
126.8 |
|
| Previous forecast | 120.7 |
124.2 |
|
| Percentage change | 1.0% |
2.1% |
|
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