Crude Oil Prices to Fall, Natural Gas Prices to Rise Through 2026 Amid Trade Shifts: EIA

Recent developments in global trade policy and oil production are expected to lead to lower Brent crude oil prices during the remainder of 2025 and 2026 than previously forecast, according to the U.S. Energy Information Administration’s May Short-Term Energy Outlook. The agency also forecasts natural gas prices to rise during 2025 and 2026, following historic lows during 2024.

The agency expects the Brent crude oil price to average around $66/barrel during 2025 and around $59/barrel during 2026, both significantly lower than the 2024 average of $81/ barrel and the agency’s previous forecast at the start of the year. The agency in its January short term energy outlook forecast had projected Brent crude oil prices to be $74/barrel in 2025 and $66/barrel in 2026. The price decline expectations can be attributed to weaker global petroleum demand due to global trade policy and increasing oil production.

Global trade policy remains uncertain and has led to dampened demand expectations. The agency’s current forecast for global petroleum demand is around 500,000 barrels per day (b/d) lower than their January forecast. From a fundamentals perspective, increasing oil production is expected to outpace annual oil demand growth, which rises by around 1.0 million b/d in both 2025 and 2026, leading to the accumulation of oil inventories globally. High oil inventories will lead to bearish price sentiment in the crude oil market.

Brent crude prices are also expected to decline, on the back of healthy supply fundamentals, following a decision by OPEC+ members on May 3 to start a gradual and flexible return of the 2.2 million b/d voluntary adjustments starting from April 1, 2025. OPEC+ countries will implement a production adjustment of 411 thousand b/d in June 2025.

The agency projects natural gas prices to increase to around $4.20 per million British thermal units (MMBtu) on average during Q3 2025 and average $4.10/MMBtu during 2025, almost double the price compared to 2024. The expected price increase in the coming months can be attributed to higher U.S. LNG exports and higher gas demand from the electric power sector due to seasonality. Natural gas prices are expected to average $4.80/MMBtu during 2026.