Date Compiled: 2026-04-16
Type: Scenario Framework — EIA
Related Questions: Q1 / Q2
Institution: U.S. Energy Information Administration (EIA)
Publication Date: April 7, 2026
Number of Scenarios: 1 (conditional central case)
Key Parameter: Duration of Hormuz closure — forecasts are explicitly conditional on the conflict not persisting past April 2026
Overview
The EIA's April 2026 Short-Term Energy Outlook provides the official U.S. government energy price and production forecasts, explicitly framed as conditional on the Hormuz closure resolving by the end of April 2026. The EIA describes this as unprecedented modeling territory — the strait has never before been closed and has never been reopened, so restoration timelines are necessarily speculative. Shut-in projections peak at 9.1 million b/d in April, with Brent crude forecast to peak at $115/barrel in Q2 2026 before gradually abating through late 2026 and normalizing toward $76/barrel in 2027.
Scenarios
Scenario 1: Base Case — Conflict Resolves by End of April
- Parameter: Hormuz closure does not persist past April 2026; gradual restoration begins in May
- Key Assumptions: Iraq, Saudi Arabia, Kuwait, UAE, Qatar, and Bahrain shut in 7.5 mbd in March and 9.1 mbd in April; shut-ins fall to 6.7 mbd in May and return near pre-conflict levels by late 2026; Brent averaged $103/barrel in March 2026
- Key Outputs:
- Brent Q2 2026 peak: $115/barrel
- Brent Q4 2026: below $90/barrel
- Brent 2027 average: $76/barrel
- Retail gasoline 2026 average: over $3.70/gallon; peak near $4.30/gallon in April
- Diesel 2026 average: $4.80/gallon; peak above $5.80/gallon in April
- U.S. crude production 2026: 13.5 million b/d (down from 13.6 mbd in 2025)
- U.S. LNG exports 2026: 17 Bcf/d (up from 15 Bcf/d in 2025)
Institutional Assessment
The EIA's conditional forecast represents the optimistic anchor of institutional price projections — its $115/b Q2 Brent peak is the same as the two-quarter Dallas Fed scenario, but the EIA's explicit assumption of conflict resolution by April produces a notably faster recovery path than most other institutions model. The 2027 Brent forecast of $76/b implies a full normalization of the market, with the risk premium fully unwinding within approximately 18 months. Shut-in projections of 7.5 mbd (March) rising to 9.1 mbd (April) reflect the peak disruption period, with a declining trajectory modeled into late 2026. The EIA notably flags that it has no historical precedent for either a Hormuz closure or a reopening, making restoration timelines highly uncertain.
Related Articles
- Q1 Supply Destruction
- Q2 Price Impact
- Q3 Europe Impact
- Dallas Fed Hormuz Closure
- Goldman Sachs Oil Outlook 2026
- Morgan Stanley Oil Scenarios 2026
Source
Derived from EIA (U.S. Energy Information Administration) April 2026 STEO conditional forecasts for oil supply and price paths under varying Hormuz closure durations.