EIA April STEO: Hormuz Closure Drives Oil Shut-Ins to 9.1M b/d, Brent to Peak $115/b

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U.S. ENERGY INFORMATION ADMINISTRATION
WASHINGTON DC 20585

FOR IMMEDIATE RELEASE
April 7, 2026

Hormuz closure and related production outages are key drivers in EIA’s latest forecast

The U.S. Energy Information Administration published its April Short-Term Energy Outlook this week, examining the implications of the closure of the Strait of Hormuz.

"Our petroleum forecasts are highly contingent on the interaction of three variables," EIA Administrator Tristan Abbey said. "First, to even run our model we have to make an assumption about the duration of the Strait of Hormuz closure. Second, we know that the closure is forcing production to shut in, but we can only estimate these outages. Third, just as we had never before seen the strait close, we’ve never seen it reopen. What exactly that looks like remains to be seen. Full restoration of flows will take months. Our modeling indicates that fuel prices will continue to rise until these variables resolve."

Key takeaways from the April STEO are below.

• Global oil production. Oil flows through the Strait of Hormuz continue to be limited causing oil storage to fill quickly in countries that rely on the waterway for exports. As a result, we estimate that Iraq, Saudi Arabia, Kuwait, UAE, Qatar, and Bahrain collectively shut in 7.5 million barrels per day (b/d) of crude oil production in March. We assess that production shut-ins will rise to 9.1 million b/d in April. In this outlook, we assume the conflict does not persist past April and that traffic through the Strait of Hormuz gradually resumes. Under those assumptions, we expect production shut-ins will fall to 6.7 million b/d in May and return close to pre-conflict levels in late 2026.

• Crude oil price forecast. The Brent crude oil spot price averaged $103 per barrel (b) in March, and we expect it to peak in the second quarter of 2026 (2Q26) at $115/b before easing as production shut-ins slowly abate. We maintain a risk premium on crude oil prices throughout the forecast period as we expect uncertainty around future supply disruptions to keep prices above pre-conflict levels. We forecast the Brent crude oil price will fall below $90/b in 4Q26 and average $76/b in 2027. This price forecast is highly dependent on our assumptions of both the duration of conflict in the Middle East and resulting outages in oil production.

• Retail gasoline and diesel prices. Higher crude oil prices have led to higher gasoline and diesel prices, with diesel remaining particularly elevated due to tight global supplies and U.S. inventories remaining below the five-year (2021–2025) average. We forecast retail gasoline prices to peak at a monthly average of close to $4.30 per gallon (gal) in April and average more than $3.70/gal this year. Diesel prices peak at more than $5.80/gal in April and average $4.80/gal in 2026.

• LNG exports. The reduction in flows of liquefied natural gas (LNG) exports through the Strait of Hormuz has reduced global LNG supply and sharply increased the spread between the U.S. benchmark Henry Hub spot price and European and Asian import prices. U.S. LNG export facilities are running at near-peak capacity, exporting almost 18 billion cubic feet per day of natural gas in March, close to the record set in December 2025. With capacity utilization high, only very limited flexibility exists to increase exports. That flexibility comes from deferred maintenance, the pace of new project ramp-ups, and recent export authorization agreements.

• Natural gas inventories. Natural gas inventories ended the 2025–2026 withdrawal season (November–March) 3% above the five-year average, at just over 1,900 billion cubic feet (Bcf). On the back of natural gas production growth and very limited capacity to increase exports, we expect natural gas storage injections to outpace the five-year average and end October at 4,015 Bcf, 6% more than the five-year average.
  The full April 2026 Short-Term Energy Outlook is available on the EIA website.

The product described in this press release was prepared by the U.S. Energy Information Administration (EIA), the statistical and analytical agency within the U.S. Department of Energy. By law, EIA’s data, analysis, and forecasts are independent of approval by any other officer or employee of the U.S. government. The views in the product and this press release therefore should not be construed as representing those of the U.S. Department of Energy or other federal agencies. EIA Program Contact: Tim Hess, STEO@eia.gov
EIA Press Contact: Morgan Butterfield, EIAMedia@eia.gov