1. Current Baseline & Forecasts for 2025
Most major agencies forecast a continued supply surplus in 2025—driven by growing non-OPEC+ production (especially from the US, Canada, Brazil, Guyana) versus moderate demand growth
This surplus is expected to put moderate downward pressure on prices, with average forecasts around:
EIA: Brent averaging ~$74, falling to ~$62 in H2 2025 and $59 in 2026
Goldman Sachs: Brent trading $70–85, average $76 .
JP Morgan: Low-to-mid-$60s range
BoA & Citi: BoA around $65–75; Citi forecasts Brent could drop to $60 by year-end
A Reuters economist poll puts 2025 Brent average at $74.6
Bottom line: Most call for a modest decline or stabilization around $65–75, trending lower as inventories accumulate.
2. What Could Push Prices Higher?
Geopolitical flare‑ups, especially in the Middle East: Iran threats to close the Strait of Hormuz, military action, or disruptions could spark sharp price spikes
OPEC+ policy: While high spare capacity helps moderate prices, coordinated cuts in response to surplus could support a rebound .
3. What Could Drive Prices Lower?
Demand softness, especially in China (whose imports fell ~2% in 2024) and EV adoption suppressing fuel demand
Rising non-OPEC+ output, particularly from US shale and other producers, outpacing demand growth .
Economic headwinds or tougher trade policies slowing consumption .
4. Volatility & Scenario Outlook
Scenario Expected Price Impact
Calm market Brent at $65–75, reflecting surplus
Moderate geopolitical tension Steady around $70–85
Sharp Middle‑East disruption Spikes to $90–130+ possible
Analysts like Goldman Sachs expect range-bound movement unless sudden shocks occur, with mild rise then stabilization .
Morgan Stanley, OPEC+, and others anticipate a global surplus by late 2025, weighing on prices
Final Take
Overall trend: Moderate downward or stable, as supply outpaces demand—forecasts cluster around Brent $65–75 for 2025, with lower dips possible into 2026.
Wildcards: Geopolitical tensions in the Middle East or disruptions in key chokepoints like the Strait of Hormuz could still push prices sharply higher.
Volatility: Expect fluctuations—persistent tailwinds from non-OPEC+ supply and demand trends, but geopolitics may bring sudden jumps or dips.
Budget for oil costs around $65–75/barrel through 2025—typical, but keep volatility in mind.
Monitor geopolitics for potential spikes, especially Middle East developments.
Longer-term: EV adoption and clean policies could drag demand down further, keeping prices in check.
