US Boosts 2027 Oil Output Forecast Amid Iran War Price Surge

• The US raised its 2027 domestic oil production forecast to 13.83 million barrels/day, an increase of 220,000 barrels/day, following recent price surges.
• This new projection by the Energy Information Administration (EIA) is 500,000 barrels higher than February's forecast, which predicted a decline after 2024.
• The surge in oil prices is attributed to supply disruptions from key Middle East countries, including the effective closure of the Strait of Hormuz due to the Iran War.
• US retail gasoline prices are at their highest since July 2024, with the EIA forecasting an average of $3.34/gallon in 2026, while diesel prices are also set to rise.
• Shale drillers are hedging to lock in elevated prices, supporting increased output, and Permian basin production is expected to rise by 6% in 2027.