Brent price to average $76/bbl in 2025 – EIA

A rise in global oil inventories is expected to keep the price of Brent crude to average below $80/bbl in 2025, the EIA said in its latest oil market report.

PHOTO: An oil barrel. Getty Images

The US Energy Information Administration (EIA) now projects that Brent spot price will average around $76/bbl in 2025, a decline of $2/bbl from its previous forecast.

The ongoing geopolitical risks will place upward pressure on oil prices over the next few months, with Brent crude’s price averaging $78/bbl in the first quarter of 2025. The global inventories are expected to rise from the beginning of the second quarter of next year, which will pull prices lower through 2025.

Global oil inventories fell by 900,000 b/d in the third quarter of 2024. The inventories are expected to decline by 300,000 b/d through the first quarter of 2025, the EIA said in its November short-term energy outlook (STEO) report.

The US-headquartered energy agency projects that the global oil inventory level will increase by an average of 600,000 b/d in the second half of 2025 and put downward pressure on oil prices.

“By 2Q25 [second quarter 2025], we expect OPEC+ production increases and supply growth from countries outside of OPEC+ will outweigh global oil demand growth and cause oil to be put into inventory,” the EIA said, adding that it sees Brent’s price to fall to an average of $74/bbl during that time.

“We see at least two main sources of oil price uncertainty: the future course of the ongoing Middle East conflict and OPEC+ members’ willingness to adhere to voluntary production cuts,” the EIA said.

Supply and demand estimates

Global liquid fuels and petroleum production is expected to grow by 100,000 b/d in 2024 to about 102.6 million b/d, down from the previously expected growth of 300,000 b/d, the EIA said. 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 increase by 2.1 million b/d in 2025 to 104.6 million b/d, the EIA said. “The potential for weakening commitment among OPEC+ producers to continue cutting production adds downside risk to oil prices,” it added.

Although the risk premiums associated with the Middle Eastern conflict have “moderated in recent weeks,” the severity of the events remains uncertain, “as is the potential for escalation to reduce oil supplies,” the EIA said.

The US energy agency forecasts global liquid fuel demand to average at 103.13 million b/d in 2024, up by about 70,000 b/d from its previous forecast. It has left its 2025 demand growth projection unchanged at about 104.4 million b/d.

“India has emerged as the leading source of growth in global oil consumption in our forecast. Over 2024 and 2025, India accounts for 25% of total oil consumption growth globally,” the energy agency said.

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. “We have revised China’s 2024 consumption downward several times over the past year,” it added.

By Aparupa Mazumder

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