Oil prices are projected to face downward pressure in 2025 due to a combination of factors, including U.S. tariffs and declining economic growth in major markets like India and China. A recent survey conducted by Reuters, which gathered insights from 49 economists and analysts, indicates that Brent crude is expected to average $72.94 per barrel in 2025, a decrease from February’s forecast of $74.63. Additionally, U.S. crude is anticipated to average $69.16 per barrel, slightly lower than the previous month’s estimate of $70.66.
The global oil market is shifting towards a surplus, with crude balances expected to widen by 300,000 barrels per day this year. Florian Grunberger, a senior analyst at Kpler, attributes this shift to a weaker economic outlook in China and disappointing demand from India, which overshadows a modest recovery in Europe. OPEC has predicted a rise in global oil demand, projecting an increase of 1.45 million barrels per day in 2025 and 1.43 million in 2026.
However, concerns arise regarding U.S. tariffs imposed by President Donald Trump. His “maximum pressure” campaign aiming to reduce Iran’s oil exports to zero and the introduction of a 25% tariff on oil or gas imports from Venezuela could hinder market stability and exacerbate inflation. Amid ongoing geopolitical tensions, analysts note that discussions surrounding U.S. sanctions on Russia could also impact oil supply dynamics.
Frank Schallenberger, head of commodity research at LBBW, highlights that increased sanctions against countries like Iran and Venezuela might reduce global supply and elevate prices. Conversely, a resurgence of Russian oil in the market could exert downward pressure on prices. In light of these complexities, OPEC+ is expected to maintain a careful approach to production increases.
Reports suggest that the group may continue its plan to boost production for a second consecutive month in May, while strategically managing supply to favor rising prices throughout the year.