What was the year 2025 like for the global oil market? Analysis

In 2025, the oil market behaved almost in accordance with forecasts given at the beginning of the year. The main event was the increase in production by OPEC+ countries against the background of unstable demand for it due to the uncertainty caused by the tariffs of US President Donald Trump. There is a noticeable surplus of oil on the market, which leads to falling prices for raw materials. What happened to the "black gold" in 2025 is in the Izvestia article.

Growing supply

• 2025 can be called a turning point for the global oil market in terms of the balance of supply and demand. If in 2024 global consumption was almost equal to the level of oil production, now the oil market is in surplus. The year began with a reduction in demand due to expectations about the consequences of US President Donald Trump's tariff policy. Over time, consumption increased and exceeded last year's level, but the volume of supply increased much more significantly. As a result, the oil market surplus increased to 2.6 million barrels per day in the third quarter.

• The main increase in oil production occurred in countries that are not members of the OPEC+ group and are not bound by production restrictions. Thus, by September 2025, the United States increased production to a historically high 13.844 million barrels per day. Trump's campaign slogan "Storms, baby, storms" is being implemented, but so far at a very modest pace. At the beginning of the year, the American leader promised that production growth would amount to 3 million barrels per day. In the first year of Trump's second term, it has so far amounted to 704 thousand barrels per day, and from the maximum level under Joe Biden — only 314 thousand barrels per day. However, there are still three years of government ahead, during which American oil production can still accelerate.

What awaits the global oil market in 2025. Dissection

Brazil, Canada, Argentina, and Guyana also increased production. Against this background, OPEC+ began to increase production, as Izvestia predicted at the beginning of the year. The alliance began to gradually abandon voluntary restrictions of 2.2 million barrels per day. Although actual production does not reach the established quotas, it still provides a solid foundation for the oil surplus. The queue of tankers waiting to unload at the world's largest ports has become a frequent occurrence in 2025.

• Global oil demand increased towards the end of the year, but still remains under pressure. The main drivers of restrained consumption are the slowdown in the global economy and China's ongoing transition to electric transport. The drop in demand is being held back by the large-scale replenishment of Chinese oil storage facilities.

Downward trend in prices

• A year ago, there were suggestions that 2025 would be the year of cheaper oil, and these forecasts were mostly justified. The greatest contribution to the formation of the downward trend was made by the uncertainty provoked by Trump's trade policy. The impulsive style of imposing tariffs has slowed down the global economy, cooled the ardor of investors, and put a number of global projects on hold. The oil market, which reflects the development of the global economy, was also forced to slow down.

• The resulting oil surplus also put pressure on prices. Brent quotes dropped from $80 per barrel in January 2025 to $60 per barrel in December. The price of oil practically did not leave this rather narrow corridor for it and returned to the indicators of 2021, when the global economy was still under the influence of the coronavirus pandemic.

• The forecast for 2025 assumed that the average cost of Brent crude oil would be about $70 per barrel. As a result, this figure approached $64 per barrel, deviating from the estimated value within 10%, which is an acceptable margin of error for the oil market.

Immunity to geopolitical shocks

• As a result of the high level of oil supply, the oil market has developed a kind of immunity to geopolitical shocks, which in the past could have led to noticeable and long-term spikes in oil prices. In 2025, there were many events that could claim this status, but none of them reversed the declining prices.

• Traders' strongest expectations were related to the open confrontation between Israel and Iran that took place in June. One might have expected that the threat of closure of the Strait of Hormuz alone, through which a fifth of all oil and gas supplies pass (we discussed this threat and its possible consequences in more detail here), could accelerate oil prices to triple digits. However, there was only a short-term surge, which disappeared almost immediately as soon as the active phase of the conflict stopped.

• There was no noticeable market reaction to the escalation of the conflict between the United States and Venezuela, to American tariffs designed to limit purchases of Russian oil by India, and to sanctions against Rosneft and Lukoil. All this did not lead to major economic shocks, so any "bullish" attempts by traders to take advantage of the situation and raise prices did not lead to results.

When writing the material, Izvestia communicated with:

• Sergey Pikin, Director of the Energy Development Fund.

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