Supply glut and weak demand muted oil price gains in 2025 - EIA
The US Energy Information Administration (EIA) has blamed excess oil supply and lacklustre demand for driving Brent crude’s price lower last year.
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"Crude oil prices generally declined in 2025 with supplies in the global crude oil market exceeding demand,” the EIA said.
On a monthly average, Brent crude’s price declined from $79/bbl in January 2025 to around $63/bbl last month – marking the lowest monthly average price since early 2021, the EIA said in its latest report.
The US-based agency said the reason for this decline can be attributed to a series of headwinds that emerged throughout the year. Brent crude’s price fell in the first half of 2025 due to a slowdown in economic activity that capped demand growth, it said.
By April 2025, oil prices had declined by nearly $15/bbl, “amid expectations that escalating tariffs among large economies could continue to slow economic growth,” the EIA said.
In the second half of 2025, Saudi Arabia-led OPEC group rolled back production cuts ahead of schedule, weighing on the global oil market as concerns grew that the move could push the market into oversupply.
The sharp build in global oil inventories in the second half of 2025 pushed implied stock builds to around 2.5 million b/d, outpacing consumption, the EIA said. “These stock builds were the largest recorded since 2000, aside from in 2020,” it added.
“The annual average price was $69/b [$69/bbl], the lowest since 2020, even when adjusting for inflation,” the energy agency remarked.
By Aparupa Mazumder
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