In 2025, the oil market is navigating a complex landscape. Geopolitical instability, slowing global economic growth, and the accelerating energy transition are fueling significant uncertainty around hydrocarbon prices.
So, what can we realistically expect from the oil market in the second half of the year and which factors will shape the price trends ahead?
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Geopolitics Back in the Driver’s Seat
By mid-2025, Brent crude had settled around $69 per barrel, once again highlighting oil’s sensitivity to geopolitical developments. Escalating tensions over Iran’s nuclear program, particularly in June, introduced a notable “risk premium” into the market. According to J.P. Morgan analysts, this premium currently adds about $4 per barrel. While these risks persist, much of the geopolitical uncertainty has already been priced in, making sharp upward moves in prices unlikely, unless there’s a dramatic escalation.
However, even a minor shift — such as the potential lifting of sanctions against Iran — could drastically change the outlook. Citi analysts warn that a return of Iranian oil to global markets might push Brent briefly down to the $50–55 range. While this is not the base-case scenario, it underscores the fragility of the current market balance.
Oversupply Looms: Economic Slowdown and Energy Transition
Beyond geopolitics, market fundamentals are also signaling downward pressure on prices. The World Bank forecasts Brent crude to average $64 per barrel in 2025, falling further to $60 in 2026. This outlook reflects weakening global trade and a slowdown in economic growth, both of which weigh heavily on oil demand. This trend is particularly evident in China, where the rapid adoption of electric vehicles is cutting deeply into traditional fuel consumption.
Goldman Sachs presents an even more bearish scenario, projecting that recession-driven demand could pull prices to around $59 per barrel this year, and down to $55 in 2026. At such levels, U.S. oil producers would likely be forced to scale back output, eventually tightening supply and preventing prices from falling much below $60 in the longer term.
OPEC+’s Balancing Act
OPEC+, the world’s most influential oil alliance, continues its careful balancing act between protecting prices and managing oversupply risks. In April 2025, the group revised its forecast for global oil demand growth from 1.45 million to 1.3 million barrels per day. Yet by July, it reaffirmed that the market remains in “healthy condition,” citing persistently low inventories.
Starting in August, OPEC+ nations will raise output by 548,000 barrels per day. However, they’ve made it clear that this decision could be reversed if market conditions weaken due to oversupply. This flexible approach suggests OPEC+ is aiming to keep Brent prices within a $65–70 range — levels seen as acceptable to both producers and consumers.
Still, analysts at Bank of America warn that weak demand may become OPEC+’s biggest challenge moving forward. If the global slowdown deepens, output cuts alone may not be enough to stabilize prices, increasing the risk of downward pressure.
Analyst Consensus: Moderately Pessimistic
Analysts and investment banks remain cautiously pessimistic. Most, including HSBC and Morgan Stanley, forecast Brent to average around $68–70 per barrel in the second half of 2025. J.P. Morgan and Citi are more conservative, projecting a range of $60–65.
This cautious outlook reflects two key concerns: softening demand due to economic stagnation, and the potential for increased supply, including from Iran. While OPEC+ can mitigate some of this oversupply, its ability to fully offset it is limited, particularly if economic stagnation persists.
Market Prospects: Pressure on Prices but No Collapse
For the remainder of 2025, oil prices are likely to remain moderate, fluctuating within a range of $60–70 per barrel. While geopolitical tensions will continue to inject volatility, the core driver will be the supply-demand balance, which currently leans toward surplus.
Paradoxically, a short-term dip below $60 could help bring medium-term stability. Lower profitability would likely reduce investment in production — particularly in the United States — helping to ease the oversupply and prevent a deeper decline.
As a result, although the market appears fragile at the moment, it still has a strong likelihood of stabilizing by early 2026. Assuming no major geopolitical disruptions, the oil market is positioned to avoid both a sharp collapse and extreme price spikes. In today’s uncertain global environment, such a stable outcome may be the most beneficial scenario for an economy that increasingly values predictability and balance.
