US warns oil could hit $105 through July

The US Energy Department’s forecasting arm warned on Tuesday that oil prices will likely remain high until at least July, stating that the Strait of Hormuz is effectively paralysed.

According to a new report from the Energy Information Administration (EIA), Brent crude is expected to average $105 per barrel in June and July. That price would be higher than current levels of about $91 and the pre-war price of around $70.

The EIA stated that its forecast is based on expectations that oil shipments “remain limited and oil production and inventories fall” in the coming weeks.

The forecast is consistent with what some on Wall Street have projected. JPMorgan forecasts that Brent will average $104 per barrel in the third quarter (July-September), even if the Strait of Hormuz reopens this month.

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Notably, the EIA forecast is in contrast with President Donald Trump’s frequent claims that oil and gasoline prices will plunge once an Iran deal is reached — a deal he’s claimed dozens of times is imminent.

The EIA revised its petrol price projections, predicting an average of $3.90 in 2026 and $3.64 in the US next year, up from $3.88 and $3.62, respectively, in the most recent forecast released in May.

The EIA stated that energy prices would have been even higher if demand had not been reduced by sticker shock, reduced fuel availability, and conservation efforts in Asia and other parts of the world.

The EIA also slightly increased its US oil production forecast, predicting domestic output of 13.7 million barrels per day, up from its previous forecast of unchanged production at last year’s average of 13.6 million barrels per day.

(CNN News)