Global oil production is expected to reach pre-Iran war levels by the end of this year.

The U.S. Energy Information Administration indicates that global oil production and trade will fully recover by the end of the year from the disruptions caused by the Iran conflict, according to a report released on Tuesday.

The EIA predicts that Brent crude oil, the global standard, will average $74 per barrel in the third quarter, a decrease from $85 per barrel in June. Last month, the agency had forecasted that Brent prices would average over $100 per barrel during this quarter.

The ongoing wartime blockade on the Strait of Hormuz has resulted in a significant halt of oil production from the Middle East, affecting refiners in Europe and Asia who have had to reduce fuel output.

Recently, vessel traffic through the Strait has increased after a preliminary agreement between the U.S. and Iran. Although the passage remains somewhat risky, the EIA has raised its annual oil production forecasts while anticipating lower oil and motor fuel prices.

The EIA expects that most of the Middle Eastern oil production that was previously suspended will return to the market by the first quarter of 2027. This influx is expected to boost global oil supply and reduce withdrawals from reserves, which will help stabilize prices in the coming months.

The EIA also noted that lower crude oil prices are likely to lead to a reduction in retail gasoline prices in the U.S. It now estimates that motor fuel costs will average $3.80 per gallon in the third quarter, down from $4.21 per gallon in the second quarter.

The repercussions of the Iran War have driven up motor fuel prices in the U.S., posing a political issue for Donald Trump and the Republican Party as they approach the midterm elections in November.