EIA Predicts Global Energy Shifts Through 2026

The U.S. Energy Information Administration (EIA) has released its Short-Term Energy Outlook (STEO) for June 2025. The report shows big shifts in the global energy market from now through 2026. These changes will affect many countries, especially energy exporters in the Middle East and North Africa region.

According to the forecast, the price of Brent crude oil is expected to average $66 per barrel in 2025. In 2026, it could fall even further to $59 per barrel. This drop is due to more oil being produced around the world, while demand grows slowly. Most of this slow demand comes from countries in the OECD group. At the same time, the global economy is not growing quickly. The United States, for example, is only expected to grow 1.4 percent in 2025. All these factors together are putting pressure on oil prices. For Middle Eastern oil producers, this could mean lower income unless global demand rises again or new deals are made to manage supply levels.

In the United States, oil production hit a record of 13.5 million barrels per day in the second quarter of 2025. This is the highest ever. However, that growth is now slowing. Fewer drilling rigs are active, and prices are soft. The EIA predicts that average production for 2025 will be about 13.4 million barrels per day. There could be a small drop in 2026. This situation might push Gulf countries to rethink their strategies, especially in the competitive Asian markets.

Natural gas prices in the U.S. are going in the other direction. The Henry Hub price is expected to rise to $4.00 per MMBtu in 2025 and then increase again to $4.90 in 2026. One major reason is the strong demand for U.S. liquefied natural gas (LNG) exports. These exports are growing fast, from 12 billion cubic feet per day in 2024 to 16 billion cubic feet per day by 2026. This could raise competition for gas-exporting countries like Qatar.

Another important development is that the U.S. government has started to block exports of ethane to China. This has led to a 51 percent drop in the forecast for U.S. ethane exports in 2026. For countries in the Gulf that make and export petrochemicals, this could be a chance to sell more products to China and fill the supply gap.

Electricity use in the U.S. is going up. One main reason is the growing number of data centers, especially in places like Texas and the Mid-Atlantic states. These centers need a lot of power. At the same time, more solar and hydroelectric power is being used. Natural gas is becoming more expensive, so companies are switching to renewable sources. By 2026, the EIA expects that 27 percent of U.S. electricity will come from renewable energy. This trend is similar to what is happening in parts of the Middle East, where countries are investing in clean energy like solar power and green hydrogen.

Gasoline prices in the U.S. are expected to fall overall, thanks to lower oil prices and weaker demand. But there is one exception. On the U.S. West Coast, prices are likely to go up. This is because of refinery shutdowns in California and the planned closure of the LyondellBasell refinery in Houston. This tight supply in one part of the country may affect global fuel prices and trade routes.

Coal use in the U.S. may rise for a short time but is expected to drop again by 2026. This matches a broader trend of using less coal and more renewable energy. Carbon dioxide emissions will go up a bit in 2025, but they are likely to fall again in 2026 as the switch to clean power continues.

For the Middle East, this outlook brings both challenges and new chances. Oil prices may stay low, which would pressure government budgets in oil-exporting countries. LNG exporters like Qatar might find new opportunities as Asian demand grows and U.S. exports shift. Companies in the Gulf that produce petrochemicals could benefit from the fall in U.S. ethane exports to China. Countries like the UAE and Saudi Arabia are already investing in solar and wind power, which matches global energy trends.

The EIA’s June 2025 report shows that the world’s energy markets are changing quickly. Oil prices are falling, natural gas is in high demand, and electricity use is rising. For countries in the Middle East, it will be important to adapt quickly and plan ahead.