EIA: Tariff Chaos, OPEC Output Increases Spell $57/bbl WTI in 2026

A one-two punch from the Trump administration’s tariff policies and sooner-than-expected OPEC+ production increases has shaken the longer term outlook for crude oil prices, with WTI predicted to average $63.88/bbl in 2025 and $57.48 in 2026.

The analysis by the U.S. Energy Information Administration (EIA) revamped price forecasts following a topsy-turvy tariffs announcement and subsequent 90-day pause on a range of reciprocal global tariffs that the U.S. announced on April 2.

The EIA price estimates for 2025 and 2026 are both bad news for producers—if they come to pass—as breakeven prices for operators, even in the Permian Basin, require between $61/bbl and $62/bbl to remain profitable. Other oily basins, such as the Powder River, are unlikely to sustain production at such prices.

EIA noted that its modeling and analysis for its April 10 Short Term Energy Outlook report was completed on April 7 and doesn’t include more recent developments including an April 9 announcement by President Donald Trump that China would be hit by intensified tariffs. Oil initially ticked up from four year lows before prices again fell on April 10 amid the White House’s head-spinning turnabouts.

Between April 2 and April 7, WTI spot prices fell by 15% to $61.05/bbl from $72.12. Brent crude oil spot prices likewise fell by 14% to $66/bbl from April 2 to April 7. WTI futures fell $2.28, or 3.7%, to settle at $60.07/bbl on April 10, Reuters reported.

Prices tumbled as OPEC+ members said on April 3 that some countries will start production increases in May that were originally set for July. 

Part of the EIA’s assessment is based on reduced growth in oil demand—while simultaneously predicting continued growth of U.S. crude oil production.

“We now expect that global oil consumption will increase by 0.9 million barrels per day (b/d) in 2025 and 1.0 million b/d in 2026, 0.4 million b/d and 0.1 million b/d less than what we forecast in last month’s STEO, respectively,” EIA said. “However, because the recent updates to trade policy widen the range of possible GDP growth outcomes, this forecast is subject to significant uncertainty.”

However, EIA’s U.S. oil production is forecast at 13.5 MMbbl/d in 2025 and 13.6 MMbbl/d in 2026.

Globally, EIA said oil inventories will increase starting in the middle of 2025 as OPEC+ members unwind production cuts; production grows in non-OPEC countries; and oil demand growth slows.

EIA forecasts Brent crude oil prices will average $68/bbl in 2025 and fall to an average of $61/bbl in 2026.

The prices are between $6/bbl and $7/bbl lower than EIA March’s outlook “and reflect more uncertainty around global oil demand growth as well the potential for additional supply from OPEC+ in the coming months.”

“However, factors including existing sanctions on Russia, Iran, and Venezuela create additional uncertainty for crude oil prices,” EIA said.

NatGas exports to rise

The EIA also forecast natural gas demand—the total of domestic consumption and exports—will grow by 4% to 116 Bcf/d in 2025.

Growth is led by an 18% increase in exports and a 9% increase in residential and commercial consumption for space heating. Export growth will be primarily driven by LNG exports as two new LNG export facilities ramp up operations. 

Venture Global’s “Plaquemines LNG Phase 1, which started operations late last year, has been ramping up exports more quickly than we initially forecast,” EIA said.

As a result, it now expects U.S. LNG exports of just over 15 Bcf/d in 2025—a 7% increase, or 1 Bcf/d more than the EIA forecast in March.

“Although China is currently not importing U.S. LNG, we assess that ample global demand for LNG and flexible destination clauses in U.S. LNG contracts mean U.S. LNG exports will be largely unaffected by recent trade policy developments,” EIA said.

Despite a net injection into storage during March, U.S working natural gas inventories ended the withdrawal season (November through March) 4% below the five-year average as cold weather in January and February resulted in more natural gas than average being withdrawn from storage.

“Consequently, we expect higher natural gas prices this year, with the Henry Hub price averaging around $4.30 per million British thermal units (MMBtu) in 2025, up about $2.10/MMBtu from 2024.”

EIA said it expects the annual average price to increase another $0.30/MMBtu in 2026 to about $4.60/MMBtu.