Forecast overview

• Global oil market assumptions. We have increased our estimates of Middle East shut-in crude oil production in the coming months compared with our July forecast due to continued severe constraints on Strait of Hormuz transits, which we assume persist through August. We expect most crude oil production in the region to return to near pre-conflict averages in early 2027; however, we expect ongoing disruptions of about 0.6 million barrels per day to continue through the end of next year.

• Global oil prices. Based on our updated assumption, reduced oil shipments through the Strait of Hormuz lower global oil inventories further in the coming months and keep crude oil prices near levels from the first week of August. We now forecast the Brent crude oil spot price to average around $85 per barrel (b) in the third quarter of 2026 (3Q26). As inventories rebuild, with most production expected to recover by early 2027, we expect the Brent spot price to gradually fall to an average of $69/b in 2027.

• Crude oil inventories. We expect U.S. commercial crude oil inventories to remain below the five-year (2021–2025) low through the end of 2026. Increased crude oil exports, reduced imports, and high refinery runs since mid-April have led to consistent weekly declines in crude oil stocks. Net imports are forecast to remain below average through 2027 due to strong international demand for U.S. crude oil exports.

• LNG exports. U.S. liquefied natural gas (LNG) exports in 3Q26 average 16.5 billion cubic feet per day in our forecast, slightly lower than in last month’s STEO, because of ongoing maintenance at Freeport LNG. Maintenance at export terminals has decreased feedgas demand, resulting in storage levels above the five-year average in the South Central region at the end of July. Mexico’s new Energia Costa Azul LNG terminal and increased use of U.S. natural gas for power generation are driving pipeline exports higher, with total U.S. natural gas exports expected to rise through 2027.

• Natural gas prices. The Henry Hub spot price is forecast to average $2.87 per million British thermal units (MMBtu) in 3Q26, down 50 cents/MMBtu compared with the July STEO. The price decline is driven by reduced LNG feedgas demand and robust natural gas production. Our forecast assumes prices will remain below $3.00/MMBtu in the coming months, driven by near record-high storage levels heading into October.

• Electricity demand. U.S. electricity generation has been rising to meet growing demand from data centers. On August 3, the Texas governor announced a pause on new data center development, and as a result, we have lowered our forecast for electricity demand in Texas. We expect electricity load in Texas will grow by 6% in 2027, in contrast to our forecast of 14% growth in the previous STEO.

• Electricity generation. New solar projects and increased use of natural gas-fired power plants are leading sources of generation growth in 2026. Solar, hydropower, and win generation grew by 21%, 9%, and 6%, respectively, in the first half of 2026 (1H26) compared with 1H25. We expect continued growth in renewable energy capacity additions to sustain this trend through 2027. Natural gas-fired electricity generation, which increased by 2% in 1H26, is forecast to increase in 2027 as natural gas prices remain relatively low, while coal generation continues to decline due to the shift toward lower-cost natural gas.

• Coal exports. U.S. coal exports rose sharply in April and May, resulting in an upward revision of our 2026 coal exports forecast to 102 million short tons. Metallurgical coal exports increased throughout 1H26, supported by new and reopened mines, while steam coal exports fell in 1Q26 before rising in 2Q26 as global market conditions, including natural gas-to-coal switching in Europe and Asia, favored U.S. coal exporters.

You can find more information in the detailed table of forecast changes.