Oil prices are projected to decline in 2025 as swelling supply from OPEC+ and persistent trade disputes dampen demand, according to a Reuters poll released today. The survey of 40 economists and analysts marks the third consecutive month of downward revisions.
Brent crude is now expected to average $66.98 per barrel in 2025, down from April’s forecast of $68.98. U.S. crude is projected at $63.35, a drop from last month’s $65.08 estimate. This year, Brent and U.S. crude have averaged $71.08 and $67.56, respectively, based on LSEG data.
The downward trend is driven by a combination of increased OPEC+ production and uncertainty surrounding global trade. Eight OPEC+ members, including key producers, began unwinding output cuts earlier this year, boosting supply by 411,000 barrels per day (bpd) for May and June.
Sources indicate the group may approve a similar hike for July at its upcoming meeting on Saturday. Suvro Sarkar, lead energy analyst at DBS Bank, noted that these increases appear aimed at disciplining non-compliant members, particularly Kazakhstan, rather than stabilizing prices. “Compliance will be difficult to enforce,” Sarkar said, highlighting potential challenges in maintaining production discipline.
On the demand side, analysts forecast global oil demand growth of 775,000 bpd in 2025, slightly above the International Energy Agency’s estimate of 740,000 bpd. However, trade disputes and economic slowdown risks are weighing heavily on expectations.
Tobias Keller, an analyst at UniCredit, emphasized that while U.S.-related trade tensions have eased, lingering conflicts could still suppress fuel demand. Norbert Ruecker, head of economics at Julius Baer, pointed out that demand growth is increasingly driven by resource-rich nations, as fuel efficiency gains, economic uncertainty, and the rise of electric vehicles constrain consumption in major markets like the U.S. and China.
Geopolitical risks, particularly Russia’s ongoing war in Ukraine, continue to add a risk premium to oil prices, though markets have largely absorbed this uncertainty. Sarkar suggested that potential de-escalation or the lifting of sanctions on Russian oil could further depress prices, adding another layer of volatility to the market.
As OPEC+ navigates its production strategy and global trade dynamics evolve, analysts warn that oil markets will remain susceptible to sudden shifts. “Geopolitical tensions pose ongoing risks of disruption and price volatility,” Keller said, highlighting the delicate balance between supply, demand, and external pressures shaping the oil market’s trajectory in 2025.
WHAT YOU SHOULD KNOW
Oil price forecasts for 2025 have been revised downward for the third consecutive month, with Brent crude expected to average $66.98 per barrel and U.S. crude at $63.35, according to a Reuters poll of 40 analysts. The decline is attributed to increased OPEC+ supply, with output cuts being unwound by 411,000 barrels per day in May and June and potential further increases in July.
Lingering trade disputes and economic slowdown risks are dampening global oil demand, projected to grow by 775,000 barrels per day in 2025.
