Brent price to average $74/bbl in 2025 – EIA
A relatively balanced oil market in 2025 is expected to keep the price of Brent crude to average below $75/bbl in 2025, the EIA said in its latest oil market report.
PHOTO: Birdseye view of oil barrels. Getty Images
The US Energy Information Administration (EIA) now projects that Brent spot price will average around $74/bbl in 2025, a decline of $2/bbl from its previous month’s forecast.
The reduction in Brent’s price forecast comes following a ceasefire agreement between Israel and the Iran-aligned Hezbollah militants in Lebanon, which eased some supply disruption concerns in the market.
“The ceasefire removed some of the risk premium present in oil prices, which had reflected the potential for attacks on oil infrastructure and a disruption to oil supplies,” the EIA said.
Signs of weakening global oil demand growth, primarily in China, also weighed on prices. “We continue to see at least two main sources of price uncertainty: the course of the ongoing Middle East conflict and OPEC+ members’ willingness to adhere to voluntary production cuts,” the EIA added.
The ongoing OPEC+ production cuts have contributed to a drawdown of about 400,000 b/d from the global oil inventory in 2024, the energy agency estimated. The global inventories are expected to fall by 700,000 b/d in the first quarter of next year. Continued supply outside OPEC+ will lead to an average inventory build of 100,000 b/d over the remainder of 2025.
“We expect global oil inventories will end 2025 near their current volume,” with production growth mostly coming from non-OPEC countries, the EIA said in its December short-term energy outlook (STEO) report.
Supply and demand estimates
Global liquid fuels and petroleum production is expected to reach about 102.6 million b/d, the EIA said. Countries that are not part of the OPEC+ agreement will drive global liquid fuels production in 2025, it added. Production growth from non-OPEC+ countries, including the US, Canada, Guyana, and Brazil, will be the main drivers of growth.
Global liquid fuels output is expected to reach 104.24 million b/d in 2025, the US energy agency said. “We expect global production of liquid fuels will increase in 2025 by more than 1.6 million b/d, with almost 90% of the growth coming from countries outside of OPEC+,” it added.
The US energy agency forecasts global liquid fuel demand to average 103.03 million b/d in 2024, down by about 100,000 b/d from its previous forecast. Global oil consumption will increase by 1.3 million b/d to 104.32 million b/d in 2025.
“Much of this growth is in Asia, where India is now the leading source of global oil demand growth in our forecast,” the EIA said. India’s liquid fuels consumption is expected to grow by 200,000 b/d and by more than 300,000 b/d in 2025, driven by rising demand for transportation fuels, it added.
Global oil demand growth continues to face headwinds from a slowdown in China, as well as reduced consumption in the OECD group of developed nations, the EIA said. China’s oil consumption is expected to grow by less than 100,000 b/d in 2024 and about 300,000 b/d in 2025, which is lower than the average growth of 500,000 b/d achieved in 2015–2019, the EIA said.
By Aparupa Mazumder
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