Even under assumptions that the U.S.-Israel war on Iran does not persist past April and that traffic through the Strait of Hormuz gradually resumes, the world will face the pressure of rising oil prices throughout this year, the U.S. Energy Information Administration (EIA) said on Tuesday.
In its latest Short-Term Energy Outlook released on Tuesday, the EIA raised the forecast of Brent crude oil spot price for 2026 to 96 U.S. dollars per barrel from the previous forecast of 79 U.S. dollars a barrel.
Retail gasoline and diesel prices will continue the rising trend this year, said the outlook.
The outlook maintains a risk premium on crude oil prices throughout the forecast period, as the EIA expects uncertainty around future supply disruptions to keep prices above pre-conflict levels.
"Once flows through the Strait of Hormuz resume, we assume it will take time to resolve the backlog and disruption to oil tanker routes and trade flows and that the potential for future disruptions will remain at risk and create a premium in the oil price," it said.
US Energy Information Administration forecasts rising oil prices throughout 2026
Residents in the Iranian capital Tehran have welcomed the ceasefire agreement reached with the United States, but also voiced concerns over how long it might hold.
After some 40 days of deadly clashes, the United States and Iran on Wednesday agreed to a two-week ceasefire, and committed to begin a new round of peace consultations in Islamabad, the capital of Pakistan, on Friday.
On Wednesday afternoon, the number of vehicles and pedestrians in Tehran had increased significantly from previous days, and many shops that had been closed during the war were gradually reopening.
Tehran residents said they hoped that the ceasefire will hold and peace and stability will be restored.
"I am truly pleased to see so many people on the streets. The number of people is two to three times that of the previous days, which really makes me happy," said resident Hesam.
Many Iranians said that they support any action that serves Iran's national interests, but said they do not trust the U.S. as a negotiating partner following previous rounds of talks.
"A ceasefire is a good thing as long as it serves the interests of the Iranian people. However, we have already negotiated with the United States several times without reaching an agreement. If a ceasefire is merely a continuation of these fruitless negotiations, then it is meaningless. But we must continue negotiations so that the other side understands Iran's specific demands. All the terms proposed by Iran should be implemented; only under these circumstances will a ceasefire be a good thing," said Jafar.
The United Nations Security Council on Tuesday failed to adopt a draft resolution on the Strait of Hormuz. Eleven members of the Security Council voted in favor of the draft resolution, China and Russia voted against it, while Colombia and Pakistan abstained.
Ibrahim, a Tehran resident, said that China's action reflected its image as a responsible major power.
"It is a very good thing if a powerful country can play its role in the Middle East situation, and a major country like China has made its voice heard," he said.
Tehran residents welcome ceasefire with U.S. but concerns remain
