EIA cuts Brent price forecast to $66/bbl for 2025
Global oil production is set to exceed annual demand and drive up invenstories this year, the EIA said in its latest oil market report.
IMAGE: Oil barrels. Getty Images
The US Energy Information Administration (EIA) projects that the Brent crude spot price will average around $66/bbl in 2025 – about $2/bbl lower than its previous forecast – and fall by another $7/bbl to an average of $59/bbl in 2026.
The revised forecast comes amid escalating trade tensions between the US and China – the world’s top oil consumers, and OPEC+ producers' announcement to increase output way beyond previously slated levels.
Crude oil prices fell for a third consecutive month in April, the EIA said. The decline has been “driven primarily by expectations of lower global oil demand growth following the implementation of new tariffs from the United States and its largest trading partners.”
OPEC+ producers' plan to ease their crude supply cuts by 2.2 million b/d is seems to be accelerated now, adding to expectations that global oil inventories will grow at a faster rate and add downward pressure on Brent’s price in 2025 and 2026, the EIA said in its April short-term energy outlook (STEO) report.
“Significant uncertainty remains in our price forecast,” the energy agency remarked.
“The effect that new or additional tariffs will have on global economic activity and associated oil demand is still highly uncertain and could weigh heavily on oil prices going forward,” the agency added.
Supply and demand estimates
The growth in oil production by OPEC+ members will lead to an average increase of 400,000 b/d in global oil inventories in 2025 and accelerate to 800,000 b/d on average in 2026, the US agency said.
Global liquid fuels and petroleum production is expected to increase by between 1.3-1.4 million b/d to reach about 104.1 million b/d in 2025, the EIA said. Countries that are not part of the OPEC+ agreement will also contribute to the global liquid fuels production growth in 2025 and 2026, it added.
The US energy agency forecasts global oil demand to grow by 1 million b/d in both 2025 and 2026, and to average 103.7 million b/d and 104.6 million b/d, respectively.
“Oil consumption growth in our forecast continues to be less than the pre-pandemic trend,” the EIA said.
Against this broader trend, India’s liquid fuels consumption is expected to increase by 200,000 b/d in 2025 and 300,000 b/d in 2026, driven by rising demand for transportation fuels, according to the EIA. It also forecasts China’s liquid fuels consumption to grow by 200,000 b/d in both 2025 and 2026.
By Aparupa Mazumder
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