EIA sees OECD oil stocks falling to lowest since 2003 as Brent heads for $105

The forecast, published in the EIA's monthly Short-Term Energy Outlook, puts OECD stockpiles below 2.3 billion barrels by year end, a level not seen in more than two decades. Bloomberg reported the projection rests on the assumption that maritime traffic through the Strait of Hormuz will not return to pre-conflict levels until early 2027.

The mechanism is straightforward: the Iran conflict has halted roughly 11 million barrels per day of Middle Eastern production, and global inventories are being drawn down to fill the gap. The Strait of Hormuz normally carries about 20% of global oil shipments, and S&P Global noted that most production in the region remains offline. The EIA stated that 'the agreement remains unfinalized' regarding reports of a U.S.-Iran deal to reopen the route, news which has recently pulled prices lower.

What this means for UK buyers

Brent feeds through to UK wholesale gas and power pricing via oil-indexed LNG contracts and generation costs, so a sustained Brent rally tightens the whole forward curve. The Financial Times reported the EIA expects Brent to average around $105 per barrel in the June and July spot market, well above the $91.60 per barrel seen in the futures market on Tuesday. That gap between spot and forward pricing matters: if you're on a flexible contract, near-term purchasing is exposed; if you're approaching a fixed renewal, the curve may not yet fully price the drawdown.

The chart below shows Brent over the last six months, giving the context against which the EIA's $105 forecast and the $91.60 futures benchmark can be judged.

Price points and decision markers to watch:

• Brent spot against the EIA's $105/bbl June-July forecast
• The $91.60/bbl futures benchmark as a gauge of market scepticism
• OECD inventory data in the next Short-Term Energy Outlook
• Any confirmed U.S.-Iran agreement on reopening the Strait of Hormuz
• Tanker traffic data through the strait as the practical signal of normalisation

Demand is already responding. The Guardian reported the EIA now forecasts global oil demand will fall by 1.1 million barrels per day this year, reversing its previous forecast of a 200,000 barrels per day increase and marking the first annual decline since the pandemic downturn in 2020. Elevated prices, reduced fuel availability, and government conservation measures are driving the cut.

The next decision point is diplomatic rather than physical: a finalised agreement on Hormuz transit would flatten the front of the curve quickly, while continued stalemate keeps the EIA's view intact, with prices staying elevated until flows normalise and inventories rebuild. Buyers with renewals due before autumn should treat the current futures discount to the spot forecast as the key number to track.