Global oil output and trade flows should rebound fully by the end of this year from the disruptions caused by the Iran war, Reuters reports citing the US Energy Information Administration (EIA).

Global benchmark Brent crude oil prices will average around $74 a barrel in the spot market during the third quarter of this year, down from an average of $85 in June, the EIA says.

Vessel movement through the waterway has risen in recent days following a preliminary deal between the US and Iran. Although passage through Hormuz is not yet totally safe, the EIA has raised its annual oil production expectations while lowering its oil and motor fuel price forecasts.

The EIA expects most of the oil output previously shut-in across the Middle East to return online by the first quarter of 2027. That will lift global supply and reduce withdrawals from stockpiles, which should help keep prices under control in the months ahead, the agency says.

Lower crude oil prices will contribute to a drop in US retail gasoline prices, the EIA adds, expecting that motor fuel prices will average about $3.80 a gallon in the third quarter, down from $4.21 a gallon in the second quarter.