The U.S. Energy Information Administration said Tuesday it expects oil and gasoline prices to fall as global oil production and shipping flows return to near prewar levels by the end of the year.
The new projection from the independent data arm of the Energy Department includes a dramatic drop in its forecast for the global benchmark Brent crude price, which it now expects to average $74 a barrel in the third quarter, compared to $101 in its forecast last month. It now projects Brent will average $82 a barrel this year, down from last month’s forecast of $95 a barrel.
That will correspond with a significant drop in gas prices for American drivers, though they are still expected to remain well above prewar levels, EIA said. The agency projects that pump prices will average $3.80 a gallon in the third quarter and $3.40 a gallon in the fourth quarter.
Shipping traffic through the Strait of Hormuz has steadily increased since the U.S. and Iran reached a framework agreement last month to reopen the waterway, through which 20 percent of the world’s crude passed prior to the war.
