EIA sees Brent price to average $74/bbl in 2025
A gradual increase in global oil production, combined with relatively weak oil demand growth, is expected to put downward pressure on Brent crude and keep its price around $74/bbl in 2025, the EIA said in its latest oil market report.
PHOTO: Oil barrels. Getty Images
The US Energy Information Administration (EIA) now projects that the Brent spot price will average around $74/bbl in 2025 - unchanged from its previous monthly forecast - and continue to fall by 11% to $66/bbl in 2026.
Front-month ICE Brent contract fell after the EIA released its oil market report. The global oil market’s sentiment “wasn’t helped by a bearish market report from the EIA,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked.
The recent sanctions on Russia’s oil and energy sector announced on 10 January are unlikely to dent global oil production growth this year, the US energy agency said. Besides, the EIA does not expect the recently imposed US tariffs on Canada, Mexico and China to have any major effect on global oil supply.
“Although the future imposition of tariffs could affect oil trade routes, we do not presently anticipate the tariffs put forward in the February 1 executive order would significantly affect global oil supply,” it said.
The OPEC+ production cuts through the first quarter of this year are expected to result in a drawdown of about 500,000 b/d from the global oil inventory, the energy agency estimated, the EIA said in its February short-term energy outlook (STEO) report.
However, the gradual growth in oil production will lead to a 900,000 b/d increase in global oil inventories in the second half of this year and a 1.0 million b/d increase in 2026, the US agency said.
Supply and demand estimates
Global liquid fuels and petroleum production is expected to reach about 104.6 million b/d in 2025, 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.
The US energy agency forecasts global liquid fuel demand to average 104.1 million b/d in 2025. India’s liquid fuels consumption is expected to grow by 300,000 b/d in both 2025 and 2026, driven by rising demand for transportation fuels, it added.
Global oil demand growth in China is expected to get a boost as economic stimulus efforts taken by the country come into effect this year, the EIA said. China’s oil consumption is expected to grow by 200,000 b/d in 2025 and 2026.
By Aparupa Mazumder
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