The outlook for oil prices appears bleak due to trade tensions and changes in OPEC+ supply strategies, as indicated by a recent Reuters poll. The April survey of 40 economists and analysts predicts that Brent crude will average $68.98 per barrel in 2025, a decline from the previous estimate of $72.94 in March. U.S. crude is also expected to fall, now anticipated to average $65.08 per barrel, compared to last month’s forecast of $69.16. Ole Hansen, the head of commodity strategy at Saxo Bank, highlights that oil prices will be influenced by fears of an economic slowdown alongside an increase in OPEC+ production.
This situation is further compounded by expectations of sanctions and low prices negatively impacting the output growth of higher-cost producers. The trade disputes and corresponding tariffs imposed between the U.S. and China have dampened global economic growth projections and diminished fuel demand, leading oil prices to slide to a four-year low earlier in the month. Current analyst estimates suggest that crude oil demand will grow by about 860,000 barrels per day. This figure contrasts with predictions made by the International Energy Agency (IEA) and OPEC, both of which have lowered their demand growth expectations to 730,000 and 1.3 million barrels per day, respectively.
Additionally, OPEC+ is considering increasing oil supply, which analysts warn could further suppress prices if implemented. Some experts find this unlikely, citing tight markets for medium-sour crude, suggesting any planned production increases may not occur in 2025 due to the persistent downside risks to demand. HSBC also notes that lower prices could slow supply growth over time, especially in U.S. shale production.