The global oil market is undergoing significant shifts as we move into the latter half of 2025, with volatility shaped by supply growth, economic headwinds, and geopolitical negotiations. Prices have swung notably in recent weeks, reflecting the tension between rising production and slowing consumption, making close monitoring essential for governments, investors, and industry stakeholders.
The International Energy Agency (IEA) projects global oil supply to rise by 2.5 million barrels per day (bpd) in 2025, an upward revision from earlier forecasts. This surge is driven by stronger-than-expected production from both OPEC+ and non-OPEC+ members, including the decision by OPEC+ to raise output by 547,000 bpd in September, fully unwinding the cuts imposed in late 2023. In the United States, crude production is also climbing, expected to hit a record 13.6 million bpd by December 2025 thanks to advances in drilling technology and improved rig efficiency.
However, demand growth is moderating. The IEA revised global oil demand growth down to 680,000 bpd for 2025, reflecting weaker consumption in China, India, and Brazil. While industrial demand has softened, aviation fuel remains a bright spot, with jet and kerosene use projected to rise by 2.1% this year, underscoring how travel continues to underpin oil demand despite broader economic headwinds.
Brent crude prices have mirrored these dynamics, trading around $65.59 per barrel in mid-August, down from recent highs. Looking ahead, the U.S. Energy Information Administration (EIA) forecasts Brent prices averaging below $60 per barrel in the fourth quarter of 2025—a level not seen since 2020. This marks a clear shift toward softer pricing, reflecting the imbalance between increasing supply and slowing demand.
Geopolitics also continue to shape the market. Recent talks between U.S. President Donald Trump and Russian President Vladimir Putin have reassured traders about Russian oil exports, temporarily easing fears of supply disruptions and contributing to recent price declines. At the same time, ongoing discussions surrounding the Ukraine conflict remain pivotal, as any escalation or breakthrough could dramatically reshape market expectations.
In summary, the oil market is balancing a tug-of-war between robust supply and tempered demand, with geopolitics adding another layer of complexity. While supply growth points toward lower prices in the near term, risks tied to global conflicts and economic trends could quickly shift the outlook. For now, vigilance remains the key to navigating the uncertainties of the global oil market as 2025 draws to a close.