An in-depth look at the oil market: what to expect in 2025 and how the price of Brent crude may move. Discover the key factors driving futures and oil prices.
Oil isn’t just a commodity. It’s the lifeblood of the global economy. Its price determines transportation costs, shelf prices, heating bills, and even inflation levels across nations.
When oil prices rise, everything follows: from airfare to food. When they fall, it can signal a downturn in global economic activity.
That’s why keeping an eye on oil prices is crucial for businesses, investors, and analysts alike. Even the slightest price shift can ripple through logistics, raw material costs, corporate profits, and even currency exchange rates. For oil-exporting nations, a price increase can boost revenue. For importers, costs surge.
The global benchmark in the oil market is Brent crude. Its price defines how much a barrel of oil costs worldwide. It’s also the metric used by exchanges, traders, and analysts.
Already, forecasts for Brent in the coming year are shaping decisions in energy, logistics, and investment strategies. Here's what to expect from oil in 2025.
Brent crude update: key drivers behind current price action
As of June 2025, the price of Brent crude oil is hovering around $67.44 per barrel. While this is an average level compared to previous months, it’s crucial to understand why it sits here and what drives it.
Why Brent recently climbed:
- April–May 2025: Brent briefly topped $75 per barrel.
- The surge was triggered by military tensions between Israel and Iran, which threatened oil shipments through the Strait of Hormuz, one of the world’s most critical fuel export routes.
- Fears of supply disruptions sent traders rushing to lock in futures, pricing in geopolitical risk.
Why prices have fallen again:
- Geopolitical tensions have since eased.
- OPEC+ announced an increase in production volumes, applying downward pressure on prices.
- At the same time, demand in China has softened, and global growth forecasts have been revised downward, further dampening oil sentiment.
What this means for the market
Such spikes and pullbacks are par for the course. Oil prices in the global market are shaped by a wide range of factors, from political maneuvers to macroeconomic data.
Investors watch more than just current prices. Expectations are what drive momentum.
In such a volatile environment, the annual oil price forecast becomes all the more essential. It lays the foundation for business, logistics, energy, and financial strategies. Today’s figure is not a final destination; it’s part of an ongoing tug-of-war between supply and demand, with Brent as the key signal.
Oil market outlook and analyst forecasts
Against a backdrop of geopolitical tension and a fragile macroeconomic environment, leading global banks and research agencies are regularly releasing their views on the future trajectory of oil prices.
These forecasts are shaped by analysis of demand trends, production volumes, inventory levels, OPEC+ policy decisions, trade relations, and capital flows in financial markets.
What JPMorgan thinks:
The bank is betting on a moderate scenario. It expects Brent to average around $66 per barrel in 2025. Despite recent price spikes driven by the Middle East conflict, analysts anticipate a return to long-term market stability. In their view:
- OPEC+ will maintain production discipline;
- rising output from the US and Canada won’t exert excessive pressure;
- global economic growth will slow but avoid a hard landing.
This forecast rests on the idea that oil futures markets will gradually shift toward more balanced price formation.
EIA outlook:
The US Energy Information Administration projects Brent to average $74 per barrel in 2025. Its reasoning includes:
- a gradual rebound in demand from Asian economies;
- slowing US oil production growth;
- a structural supply deficit in the first half of the year.
The agency leans toward a moderately optimistic view, assuming oil markets will remain on a positive track as long as no major shocks disrupt the balance.
What HSBC says:
The British bank has trimmed its forecast to $68.50 per barrel. Its analysts argue that:
- supply growth from OPEC+ could outpace expectations;
- oil demand may remain subdued due to high inflation and the ongoing transition to alternative energy;
- investor sentiment remains cautious amid elevated volatility.
According to HSBC, the current price range and market behavior suggest that Brent may remain under pressure throughout the year.
Goldman Sachs' view:
The American investment giant is focusing on risk. Its baseline scenario puts Brent near $80, but in the event of an escalation in the Middle East conflict, the bank forecasts a spike to $100 or higher. The report highlights:
- the main threat lies in potential disruptions to supply through the Strait of Hormuz;
- traders are already pricing geopolitical risks into futures;
- any price surge would be swift and sharp if military tensions escalate.
Goldman Sachs emphasizes that in times of crisis, the price of oil in the global market can become extremely volatile.
Analyst forecast table for 2025
| Analyst / Organization | Forecast ($/barrel) | Commentary |
| JPMorgan | $66 | Stable market, moderate demand |
| EIA (US) | $74 | East Asia drives demand up |
| HSBC | $68.50 | Demand declines + supply grows |
| Goldman Sachs | $80 (base), up to $100+ | If the Middle East conflict escalates |
What moves global oil market
The price of oil is shaped by more than just futures quotes. It reflects a wide range of forces — political decisions, supply-demand balance, global crises, and even tech trends. Here are four elements currently exerting pressure on the market.
Geopolitics: instability = price increase
The Middle East remains a historic flashpoint. In spring 2025, the conflict between Israel and Iran pushed Brent crude above $75 per barrel. The main threat is a potential blockade of the Strait of Hormuz, which handles up to 20% of global oil exports. Even rumors of military action in this region trigger immediate reactions from traders and a surge in prices.
At such moments, the dynamics of the oil futures market become especially clear: major players scramble to hedge risks, pushing prices higher.
Market pressure from OPEC+
In June 2025, OPEC+ nations agreed to boost oil production by 411,000 barrels per day. This decision could significantly impact market balance:
- More oil = potential downward pressure on prices
- Increased strain on non-OPEC producers (such as the US and Canada)
- A likely market correction in case of oversupply
Analysts believe such steps from OPEC+ could stall the bullish momentum seen in early-year oil price forecasts.
Sanctions and trade policy: uncertainty factor
The US continues to impose sanctions on select oil-producing nations, including Iran and Venezuela. Simultaneously, new tariffs in trade with China are affecting global demand.
These developments:
- disrupt logistics chains
- force traders to price in political risks
- increase volatility across the oil market
In this environment, Brent becomes especially sensitive, reacting not just to economic trends but to every headline out of Washington or Tehran.
Technology and consumption: oil market evolution
Demand is the second major price driver. And here, much depends on:
- economic growth in the US, China, and the EU
- the pace of electric vehicle adoption
- government-backed support for alternative energy
- investment activity in green technologies
All of this is slowing oil consumption growth. The world is gradually shifting from dependency to diversification. As a result, even if supply is constrained, prices may not rise because demand is lagging.
Futures market role in oil pricing
Many wonder why oil prices fluctuate even when inventories are stable and tankers are running on schedule. The reason is that actual deliveries aren’t the only factor influencing cost. The expectations market, specifically oil futures, plays a major role.
Understanding futures contracts
A futures contract is a market agreement to deliver oil at a fixed price at a specified time in the future. Investors, traders, or major companies agree in advance: “We’ll buy oil in three months at $70.” No matter what the price turns out to be then, the deal is already locked in.
Why does this matter? Because these deals shape the market’s expectations. Which means:
- If players believe prices will rise, futures become more expensive.
- If they expect a drop, contract prices fall.
- These signals are instantly reflected in current quotes.
How oil futures exchange works
At venues like ICE or NYMEX, millions of futures contracts are signed daily. Most don’t lead to actual oil delivery—the contracts are just resold—but they set the direction of market movement.
When geopolitical tensions flare or supply risks emerge, traders buy up futures en masse. This creates demand, and Brent crude prices begin to climb even without a physical shortage.
Why this drives volatility
Futures trading makes the market hypersensitive to news. For example:
- One tweet from a politician — and thousands of contracts are repriced.
- An inventory report — and prices swing within hours.
- Rumors about OPEC decisions — and the market reacts before anything is confirmed.
This is why oil futures aren’t just trading instruments; they’re a mirror of market sentiment. They reflect trends and actively shape them, influencing real-time price dynamics.
For businesses and analysts, the takeaway is clear: to forecast oil prices for the year ahead, one must watch not only supply and demand but also behavior across the futures landscape.
Risks and uncertainty in oil market
The oil market has never been and will never be stable. It is an environment where any global event, from sanctions to natural disasters, can trigger a price spike or a crash.
Key types of risks:
- Supply disruptions
Wars, terrorist attacks, sanctions, and blockades all directly affect the physical availability of oil. If shipments through key routes (such as the Strait of Hormuz) come under threat, prices will spike immediately. - Political decisions
A single statement from a central bank or a new government can shift the market. Sanctions on oil-exporting countries, the removal of subsidies, or changes in taxation all influence supply and demand. - Economic downturns
A drop in GDP in the US, China, or the EU almost inevitably leads to reduced oil consumption. As a result, supply can begin to outpace demand, dragging prices down.
Volatility as new norm
With current levels of uncertainty, wide price swings are becoming standard. Today, oil may be priced at $67, and a month later at $75, or $60. If geopolitical tensions escalate, as Goldman Sachs has projected, prices could shoot up to $100 or more. Conversely, in a weak economy with oversupply, prices might fall back to 2020 levels.
Conclusion: what to expect and how to respond
If market conditions remain stable, analysts generally agree that Brent crude will fluctuate within a $65 to $75 per barrel range. This is a moderate scenario, without sharp spikes or collapses. But as we've seen in the first half of 2025, any external shock, from policy shifts to sudden conflicts, can overturn forecasts in a matter of days.
That’s why market participants, from investors to logistics firms, need to stay in a constant state of alert. Relying on last year’s playbook is risky. Flexibility is key.
The strategy that works in 2025:
- Flexibility in procurement and investment;
- Diversification of risks, including geographically;
- Deep understanding of pricing mechanisms;
- Close monitoring of inventory data, political developments, and movements on oil futures exchanges.
The bottom line is that oil is no longer just a commodity. It’s a tool of policy, a barometer of global sentiment, and a critical asset for long-term planning. And the better we understand how its price is formed, the more confident we become in navigating any phase of the economic cycle.
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