Oil prices are expected to remain stable in 2025, as analysts predict that ample global supply and potential geopolitical developments, such as a Russia-Ukraine peace deal, will counterbalance the impact of U.S. sanctions.
The market’s resilience is attributed to the significant spare production capacity held by OPEC+ and robust non-OPEC output. HSBC’s Kim Fustier noted that price spikes have been capped in the past by OPEC+’s ability to offset supply disruptions, as seen during the October 2024 tensions between Iran and Israel.
Recent U.S. sanctions targeting Iranian oil brokers, tanker operators, and shipping firms, as well as measures against Russia’s oil and gas revenues, have raised concerns about supply constraints. However, analysts believe these sanctions alone may not sustain higher prices. Cyrus De La Rubia, chief economist at Hamburg Commercial Bank, highlighted that an expected oversupply in the market could push prices lower.
The possibility of a Russia-Ukraine peace deal is another factor influencing oil price forecasts. While a peace agreement could temporarily drive Brent prices toward $70, analysts expect any decline to be short-lived. Stratas Advisors President John Paisie suggested that prices would rebound once the market realizes the limited impact on oil volumes.
Global oil demand is projected to grow by 788,000 to 2.0 million barrels per day (bpd) in 2025, according to the poll. OPEC forecasts a rise of 1.45 million bpd in 2025 and 1.43 million bpd in 2026. However, uncertainty remains over whether OPEC+ will proceed with its plan to increase oil supply starting in April. Some analysts anticipate the group may delay easing output cuts to prevent further price declines.
“Healthy non-OPEC output continues to challenge OPEC+’s ability to increase its production, while demand is unlikely to reaccelerate meaningfully,” Fustier said, underscoring the delicate balance between supply and demand in the global oil market.