Expert forecasts Brent oil price for the first half of 2025

In the baseline scenario, the price of Brent oil in the first half of 2025 will remain at the current level with possible minor deviations. Capital Lab partner Evgeny Shatov told Izvestia on January 3.

"OPEC production restrictions have led to the fact that reserve capacity has been building up. The group has largely held significant reserves since the pandemic, and its high level of unused capacity is one of the main reasons why crude prices have remained more resilient to supply shocks (such as those related to geopolitical risks). <...> The abundance of available oil has also reduced the likelihood of a sudden spike in oil prices. Saudi Arabia (47%), the United Arab Emirates (23%), Iran (9%) and Iraq (9%) hold the largest share of OPEC's spare capacity (together about 6.6 million barrels per day)," he recalled.

According to the expert, OPEC+ continues to stick to its strategy of supporting prices (relative to market share), and its planned production growth has been postponed - for the third time - for another three months and slowed down. This means that the group's members understand the fact that there is currently no room in the market for additional barrels.

"This should limit the fall in oil prices, although there is still the possibility of a surplus in 2025 (according to the International Energy Agency, the market will still have a surplus of 950,000 barrels per day in 2025), even without any production growth," Shatov said.

He specified that tough trade duties, stricter enforcement of sanctions after US President-elect Donald Trump took office, as well as political turmoil in the Middle East, among other things, could have an impact on oil quotations.

"The short-term not-so-happy outlook for crude oil demand has a lot to do with continued uncertainty in China. Beijing should only deliver around 20% of global oil demand growth compared to previous expectations of over 50%, as the country struggles with economic woes and persistent problems in the real estate sector, and the negative impact of electric vehicle adoption on oil consumption must be taken into account," the expert added.

In October, Sergei Tereshkin, the founder and CEO of the Open Oil Market, gave Izvestia a forecast that the average price of Brent crude oil will fall below $70 per barrel in 2025. According to him, the market will be increasingly influenced by long-term factors, including stabilization of global demand.