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Oil market uncertainty could significantly affect prices
Wood Mackenzie Forecasts Brent Crude to Average $73.00/bbl in 2025
1 minute read
Wood Mackenzie projects that Brent crude oil prices will average $73.00 per barrel (bbl) in 2025, according to its latest market outlook. The forecast considers various geopolitical and economic factors, including potential peace talks between Russia and the US regarding the Ukraine conflict, ongoing tariffs, and sanctions against Iran.
The outlook anticipates global oil demand to increase by 1.2 million barrels per day (b/d) in 2025, while non-OPEC production is expected to grow by 1.5 million b/d. This supply growth outpacing demand creates challenges for OPEC+ (OPEC plus 10 non-OPEC countries) in managing market balance.
Ann-Louise Hittle, Vice President of Oils Research at Wood Mackenzie, commented on the forecast:
"Our 2025 outlook reflects a complex interplay of factors affecting the oil market. The robust growth in non-OPEC production means OPEC+ faces the challenge of carefully managing supply to maintain market stability. The projected price trajectory, declining from quarterly averages of $77.00/bbl in Q1 to $70.00/bbl in Q4 2025, underscores the delicate balance between supply and demand dynamics."
The analysis assumes OPEC+ will follow its current plan to ease 2.2 million b/d of production restraint between April 2025 and September 2026, depending on market conditions. Regional demand growth is expected to be led by Asia Pacific, with China and India as key drivers.
Wood Mackenzie's forecast considers various uncertainties, including the potential lifting of US sanctions against Russia, the impact of existing tariffs on global GDP growth, and the effects of sanctions on Iran's oil production.
For demand, an anticipated soft recovery in global industrial production helps support the projected gains this year. On a regional basis, Asia Pacific demand grows by 0.6 million b/d in 2025. China and India combined drive 0.4 million b/d of that growth. Non-OECD demand is expected to rise 1.2 million b/d, compared to a contraction of just over 80,000 b/d in OECD countries.