By Ejekwu Chidiebere
In a few months from now, (July to be precise), the world will once again be gathering at the historically-symbolic Hofburg Palace, in the city of Vienna, for the 9th OPEC International Seminar whose key ptogramme highlights among others include, an analytical presentation on global market stability and the future demand dynamics, and then, the need for collaborative dialogues on sustainable development and global cooperation – this and many more have been lined up, with great egg-heads in the industry assigned to simplify them.
With what now seems to look like an escalation of conflicts of interests among world leaders, including Donald Trump’s stance on the sustained conflict between Ukraine and Russia, perceived energy transition policy disequilibrium, common market principle of demand and supply among other economic policy indices, it won’t be out of place to see commodity prices including crude fluctuating to the right and to the left.
Brent crude oil prices according to Woodmac’s latest monthly oil market outlook, are projected to average $73 per barrel in 2025, down $7 per barrel per barrel from 2024 – the $73 per barrel forecast for this year, revising down $0.40 per barrel from the early February monthly report. The outlook according to Woods was primarily shaped by two factors namely, the OPEC+ production plans and US tariff policies.
Ann-Louise Hittle, Vice President of Oils Research at the firm, stated: “We’re seeing a complex interplay of supply and demand factors. While global demand is expected to increase by 1.1 million barrels per day in 2025, non-OPEC production is forecasted to rise by 1.4 million barrels per day, potentially outpacing demand growth.”
The outlook highlights the key points from the forecast to include, the OPEC+ plans to increase production in small monthly increments from April 2025 through September 2026, noting that postponing this plan will not only support prices but could also offset the impact of additional US tariffs.
Global economic growth for 2025 the report indicates is projected at 2.8%, adding however that this could be adjusted downward by around 0.5 percentage points, depending on potential trade war scenarios.
It went on to underline that in 2025, slower GDP growth could reduce the oil demand increase by about 0.4 million barrels per day, with anticipation that the annual average for Brent crude could also be seen hovering between $3 to $5 per barrel lower, assuming oil demand growth weakens. Emphasizing however that these projections are not absolute but are rather subject to change based on global economic conditions, tariff and trade policies, and OPEC+ decisions.
“Slower GDP growth would put the demand gain in 2025 about 0.4 million b/d less than the current projection for the year,” says Hittle. “The resulting 0.7 million b/d year-on-year gain would be surpassed to a greater degree by the increase in non-OPEC supply, the majority of which is from conventional projects, so largely independent to oil price. This risk would leave little room for OPEC+ to pursue its plan to bring output back into the market.”