The U.S. Energy Information Administration published its July Short-Term Energy Outlook (STEO), increasing its expectations for global oil production.

Shipping traffic through the Strait of Hormuz has increased following the June 18 memorandum of understanding (MOU) between the United States and Iran to end a months-long conflict and reopen the strait. EIA now expects worldwide crude oil production and trade flows to rebound to near pre-conflict levels by year’s end, with most previously shut in production returning online by the first quarter of 2027. EIA forecasts that more oil production globally will lower crude oil and gasoline prices, with the U.S. average retail gasoline prices averaging about $3.60 per gallon (gal) in the second half of this year, down from $4.48/gal in May.

Key takeaways from the July STEO are below.

U.S. energy market indicators 2025 2026 2027

Brent crude oil spot price (dollars per barrel) $69 $82 $65

Retail gasoline price (dollars per gallon) $3.10 $3.64 $3.09

U.S. crude oil production (million barrels per day) 13.6 13.8 14.0

Natural gas price at Henry Hub (dollars per million British thermal units) $3.53 $3.67 $3.49

U.S. liquefied natural gas gross exports (billion cubic feet per day) 15 17 19

Shares of U.S. electricity generation

Natural gas 40% 40% 40%

Coal 17% 15% 15%

Nuclear 18% 18% 18%

Conventional hydropower 6% 6% 6%

Wind 11% 11% 12%

Solar 7% 8% 9%

Other energy sources 1% 1% 1%

U.S. GDP (percentage change) 2.1% 2.1% 2.3%

U.S. CO 2 emissions (billion metric tons) 4.9 4.8 4.8

Data source: U.S. Energy Information Administration, Short-Term Energy Outlook, July 2026

Note: Values in this table are rounded and may not match values in other tables in this report.

Global oil markets. Following the June 18 MOU between the United States and Iran to end the conflict and increased traffic through the Strait of Hormuz, EIA increased its forecast for global oil production and now expects crude oil output and trade flows to return to near pre-conflict levels by year end, with most shut in production restored by early 2027.
Crude oil price forecast. Rising global oil supply and slowing inventory withdrawals have pushed oil prices lower. The Brent crude oil spot price averaged $85 per barrel (b) in June, down $22/b from May and $32/b from the April 2026 peak. EIA forecasts Brent crude oil prices to average $74/b in the third quarter of 2026, $27/b lower than last month’s forecast. EIA expects continued oil inventory builds over the next year will push crude oil prices lower, with Brent falling to an average of $65/b in 2027.
U.S. gasoline prices. Lower crude oil prices will contribute to a drop in U.S. retail gasoline prices, with EIA’s forecast showing 3Q26 averages declining to $3.80/gal from $4.21/gal in 2Q26. Although tight gasoline inventories keep refiners’ margins elevated in the near term, we expect rebuilding stocks and the end of the summer demand season to narrow those margins and push prices even lower to about $3.40/gal in 4Q26, with the annual average falling below $3.10/gal in 2027.
Natural gas prices. Record U.S. natural gas production will help meet rising demand and push prices lower, with Henry Hub spot prices averaging close to $3.70 per million British thermal units (MMBtu) in 2026 before easing below $3.50/MMBtu in 2027.

The full July 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: EIAMedia@eia.gov

U.S. Energy Information Administration

1000 Independence Ave., SW

Washington, DC 20585

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