As of March 2025,
Brent crude oil prices have experienced fluctuations: its price traded between
$68.30 and slightly above $73 per barrel. This volatility reflects evolving
macroeconomic factors and geopolitical dynamics. OPEC+ has announced plans to
gradually increase oil production starting in April 2025, aiming to unwind 2.2 million barrels per day of previous cuts over an 18-month period. Despite global
efforts to transition towards renewable energy sources, oil continues to play a
pivotal role in the global economy. Octa Broker, a broker with globally
recognised licenses, discusses the potential attractiveness of investments in
oil in 2025 and the risks to consider.
Oil Price Forecasts for 2025: Expert Predictions
Oil
can become a lucrative trade option in 2025. The U.S. Energy Information
Administration (EIA) projects Brent crude oil prices to
average $74 per barrel in 2025 and decline
to $68 per barrel in 2026. Pickering Energy Partners’ Chief
Investment Officer, Dan Pickering, expects oil prices to range between $65 and
$75 per barrel in 2025amid ongoing supply tightness
and geopolitical risks.
According
to Kar Yong Ang, financial market analyst at Octa Broker, oil remains a core asset for traders looking to hedge against
inflation and geopolitical risk. He says that ‘Oil’s price movements in 2025 will be shaped by
supply-side decisions from OPEC+ and the geopolitical landscape. Traders should
be prepared for volatility but also recognise the potential for trading
opportunities in these market conditions.’ Global oil demand is projected
to rise by 1.4 million barrels per day in 2025, driven by strong air travel and
automotive demand. However, economic uncertainties, including tariff disputes and potential recession fears, have introduced near-term instability in the oil market.
Factors Affecting Oil Prices
Geopolitical tensions continue to be a leading force in the oil market. The current political tension and
conflict in the principal areas of oil production can affect supply chains.
Despite tensions simmering in the Middle East, strong global oil supply is keeping prices from shooting spectacularly.
OPEC+ remains the world’s dominant oil supplier, recently
indicating a willingness to increase production—an outlook that can put
pressure on prices. But non-OPEC producers, particularly U.S. shale firms, are
significant as well. While U.S. production remains robust, its growth rate has
slowed compared to recent years.
On
the demand side, China remains the largest crude oil consumer, but its slowing
economy is making the sector apprehensive about future demand. India, on its
part, is continuing to exhibit healthy demand, underpinning market stability,
while the U.S. is contributing to potential headwinds powered by tariff-related
economic pressure. These supply-side-leading dynamics will play out with
demand-side uncertainty and set the trajectory of the petroleum market over the
next few months.
Oil Investment Potential in 2025 and Associated Risks
Oil has historically been a trusted inflation hedge, but
in 2025 its direction is not at all obvious. The market is being pulled in two
opposite directions by a mix of economic and geopolitical pressures, each with
the power to move prices a lot.
On the downside, the spectre of a worldwide economic
slowdown threatens the market. New tariffs and increasing trade tensions have
the power to sap demand and therefore pull oil prices lower. Crude can plummet
sharply if it turns for the worse, and a full-fledged recession sets in.
Meanwhile, Middle East instability is building, and with Iran becoming
increasingly involved, the risk of supply disruptions is increasing. If it
escalates further, oil can come back hard.
OPEC has also complicated matters. The cartel has been
increasing production, expecting demand to rise as well, but there is a very
real chance that they overestimated. When demand doesn’t rise as much as hoped,
the market is in an oversupply situation, and prices will be falling again.
And then there is the
longer-term transformation. The worldwide push towards renewables is slowly
reshaping energy markets, and while the transition won’t be instantaneous, it’s
already tightening the screws on oil demand. Prices might not react in the near
term, but the handwriting is on the wall.
Meanwhile,
U.S. shale, once the biggest wild card in global oil supply, is no longer the
unstoppable force that it was. Production is still robust, but growth has
slowed, and most believe that the industry has already peaked. That is one
reason that can potentially keep prices underpinned in the long term.
Weak
demand forecasts by China were one of the key drivers of oil prices in 2024. In
2025 political tensions might give rise to supply shocks resulting in surprise
price peaks, making oil a good option as a short-term trade. In the long term,
the asset price may remain relatively stable or even decrease, as expected by
the experts.
However, traders
must balance risks before they invest, even in the short term. Oil prices are
highly sensitive to geopolitical tensions, which may usher in unexpected price
swings. Recessions in large economies, particularly China, may dampen demand,
while the global shift towards alternative energy sources is a long-term threat
to the supremacy of oil. In addition, overproduction by the oil-producing
nations may result in lower prices and render it unprofitable for investors.
The Role of Oil in the Global Energy Transition
Oil
companies are still expanding their portfolios into renewable energy
investments, showing heightened interest in sustainability. Investment
in clean energy by oil and gas companies
rose to approximately USD 30 billion
in 2023, which accounts
for less than 4% of their overall capital expenditure. Notably, over 60%
of this investment came from just four major companies: Equinor, Total Energies,
Shell, and BP, highlighting that a small group of industry
leaders are spearheading the transition.
This push into wind, solar, and
hydrogen investments, alongside continued oil production, provides new
opportunities for traders to diversify their portfolios with both conventional
energy assets and new renewables.
Practical Recommendations for Traders and Investors
To successfully trade the oil market in 2025, investors and traders can consider the
following tips:
1.Stay
Informed on Market Fundamentals. For example, follow news regarding the key drivers of oil prices. To
track oil prices effectively, focus on primary short-term influences.
Geopolitical threats, especially in Ukraine and the Middle East, are
sudden market changes. Central bank forecasts and interest rate maneuvers
influence demand macroeconomically. Political steps — tariffs, and
sanctions — affect prices as well. Additionally, track EIA stockpile
reports, also IEA and OPEC bulletins. These reports offer valuable
insights into global energy supply and demand dynamics, allowing for a
more comprehensive understanding of market trends and potential price
fluctuations.
2.Utilise
Diverse Trading Instruments like ETFs or CFDs. The latter allows
traders to speculate on the future movement of oil
prices without having to own the underlying commodity, hence requiring smaller investments.
3.Implement
Robust Risk Management Strategies. Due to the
high volatility of oil markets,
effective risk management must be employed.
This includes stop-loss orders, take-profits, portfolio diversification,
and position sizing, which is advised not to exceed 1-2% of capital per
trade.
2025 oil markets are a complex mix of risk
and opportunity. Macro drivers such as world economic growth patterns
and the pace towards renewables will drive medium- and long-term demand curves,
but geopolitical tensions and supply-side pressures can underpin high price
levels. Those who enter the market with a sophisticated
research strategy — balancing fundamental and technical factors — will
be well-equipped to navigate this changing
landscape.
Oil
companies’ ability to make renewable investments alongside traditional energy
production highlights the sector’s ongoing development. Short-term volatility
can be leveraged for tactical gains by traders, but long-term investors must
ride the structural adjustments that are likely to define the
industry for the next two decades. Good risk
management, continuous market studies, and diversification in exposure will remain the
keys to success
as the energy sector evolves.
Disclaimer: Trading involves risks and may not be
suitable for all investors. Use your expertise wisely and evaluate all
associated risks before making an investment decision.
Octa is an international
broker that has been providing online trading services worldwide since 2011. It
offers commission-free access to financial markets and various services used by
clients from 180 countries who have opened more than 52 million trading accounts.
To help its clients reach their investment goals, Octa offers free educational
webinars, articles, and analytical tools. The company is involved in a
comprehensive network of charitable and humanitarian initiatives, including the
improvement of educational infrastructure and short-notice relief projects
supporting local communities. Since its foundation, Octa has won more than 100 awards, including the
‘Most Reliable Broker Global 2024’ award from Global Forex Awards and the ‘Best
Mobile Trading Platform 2024’ award from Global Brand Magazine.
As of March 2025,
Brent crude oil prices have experienced fluctuations: its price traded between
$68.30 and slightly above $73 per barrel. This volatility reflects evolving
macroeconomic factors and geopolitical dynamics. OPEC+ has announced plans to
gradually increase oil production starting in April 2025, aiming to unwind 2.2 million barrels per day of previous cuts over an 18-month period. Despite global
efforts to transition towards renewable energy sources, oil continues to play a
pivotal role in the global economy. Octa Broker, a broker with globally
recognised licenses, discusses the potential attractiveness of investments in
oil in 2025 and the risks to consider.
Oil Price Forecasts for 2025: Expert Predictions
Oil
can become a lucrative trade option in 2025. The U.S. Energy Information
Administration (EIA) projects Brent crude oil prices to
average $74 per barrel in 2025 and decline
to $68 per barrel in 2026. Pickering Energy Partners’ Chief
Investment Officer, Dan Pickering, expects oil prices to range between $65 and
$75 per barrel in 2025amid ongoing supply tightness
and geopolitical risks.
According
to Kar Yong Ang, financial market analyst at Octa Broker, oil remains a core asset for traders looking to hedge against
inflation and geopolitical risk. He says that ‘Oil’s price movements in 2025 will be shaped by
supply-side decisions from OPEC+ and the geopolitical landscape. Traders should
be prepared for volatility but also recognise the potential for trading
opportunities in these market conditions.’ Global oil demand is projected
to rise by 1.4 million barrels per day in 2025, driven by strong air travel and
automotive demand. However, economic uncertainties, including tariff disputes and potential recession fears, have introduced near-term instability in the oil market.
Factors Affecting Oil Prices
Geopolitical tensions continue to be a leading force in the oil market. The current political tension and
conflict in the principal areas of oil production can affect supply chains.
Despite tensions simmering in the Middle East, strong global oil supply is keeping prices from shooting spectacularly.
OPEC+ remains the world’s dominant oil supplier, recently
indicating a willingness to increase production—an outlook that can put
pressure on prices. But non-OPEC producers, particularly U.S. shale firms, are
significant as well. While U.S. production remains robust, its growth rate has
slowed compared to recent years.
On
the demand side, China remains the largest crude oil consumer, but its slowing
economy is making the sector apprehensive about future demand. India, on its
part, is continuing to exhibit healthy demand, underpinning market stability,
while the U.S. is contributing to potential headwinds powered by tariff-related
economic pressure. These supply-side-leading dynamics will play out with
demand-side uncertainty and set the trajectory of the petroleum market over the
next few months.
Oil Investment Potential in 2025 and Associated Risks
Oil has historically been a trusted inflation hedge, but
in 2025 its direction is not at all obvious. The market is being pulled in two
opposite directions by a mix of economic and geopolitical pressures, each with
the power to move prices a lot.
On the downside, the spectre of a worldwide economic
slowdown threatens the market. New tariffs and increasing trade tensions have
the power to sap demand and therefore pull oil prices lower. Crude can plummet
sharply if it turns for the worse, and a full-fledged recession sets in.
Meanwhile, Middle East instability is building, and with Iran becoming
increasingly involved, the risk of supply disruptions is increasing. If it
escalates further, oil can come back hard.
OPEC has also complicated matters. The cartel has been
increasing production, expecting demand to rise as well, but there is a very
real chance that they overestimated. When demand doesn’t rise as much as hoped,
the market is in an oversupply situation, and prices will be falling again.
And then there is the
longer-term transformation. The worldwide push towards renewables is slowly
reshaping energy markets, and while the transition won’t be instantaneous, it’s
already tightening the screws on oil demand. Prices might not react in the near
term, but the handwriting is on the wall.
Meanwhile,
U.S. shale, once the biggest wild card in global oil supply, is no longer the
unstoppable force that it was. Production is still robust, but growth has
slowed, and most believe that the industry has already peaked. That is one
reason that can potentially keep prices underpinned in the long term.
Weak
demand forecasts by China were one of the key drivers of oil prices in 2024. In
2025 political tensions might give rise to supply shocks resulting in surprise
price peaks, making oil a good option as a short-term trade. In the long term,
the asset price may remain relatively stable or even decrease, as expected by
the experts.
However, traders
must balance risks before they invest, even in the short term. Oil prices are
highly sensitive to geopolitical tensions, which may usher in unexpected price
swings. Recessions in large economies, particularly China, may dampen demand,
while the global shift towards alternative energy sources is a long-term threat
to the supremacy of oil. In addition, overproduction by the oil-producing
nations may result in lower prices and render it unprofitable for investors.
The Role of Oil in the Global Energy Transition
Oil
companies are still expanding their portfolios into renewable energy
investments, showing heightened interest in sustainability. Investment
in clean energy by oil and gas companies
rose to approximately USD 30 billion
in 2023, which accounts
for less than 4% of their overall capital expenditure. Notably, over 60%
of this investment came from just four major companies: Equinor, Total Energies,
Shell, and BP, highlighting that a small group of industry
leaders are spearheading the transition.
This push into wind, solar, and
hydrogen investments, alongside continued oil production, provides new
opportunities for traders to diversify their portfolios with both conventional
energy assets and new renewables.
Practical Recommendations for Traders and Investors
To successfully trade the oil market in 2025, investors and traders can consider the
following tips:
1.Stay
Informed on Market Fundamentals. For example, follow news regarding the key drivers of oil prices. To
track oil prices effectively, focus on primary short-term influences.
Geopolitical threats, especially in Ukraine and the Middle East, are
sudden market changes. Central bank forecasts and interest rate maneuvers
influence demand macroeconomically. Political steps — tariffs, and
sanctions — affect prices as well. Additionally, track EIA stockpile
reports, also IEA and OPEC bulletins. These reports offer valuable
insights into global energy supply and demand dynamics, allowing for a
more comprehensive understanding of market trends and potential price
fluctuations.
2.Utilise
Diverse Trading Instruments like ETFs or CFDs. The latter allows
traders to speculate on the future movement of oil
prices without having to own the underlying commodity, hence requiring smaller investments.
3.Implement
Robust Risk Management Strategies. Due to the
high volatility of oil markets,
effective risk management must be employed.
This includes stop-loss orders, take-profits, portfolio diversification,
and position sizing, which is advised not to exceed 1-2% of capital per
trade.
2025 oil markets are a complex mix of risk
and opportunity. Macro drivers such as world economic growth patterns
and the pace towards renewables will drive medium- and long-term demand curves,
but geopolitical tensions and supply-side pressures can underpin high price
levels. Those who enter the market with a sophisticated
research strategy — balancing fundamental and technical factors — will
be well-equipped to navigate this changing
landscape.
Oil
companies’ ability to make renewable investments alongside traditional energy
production highlights the sector’s ongoing development. Short-term volatility
can be leveraged for tactical gains by traders, but long-term investors must
ride the structural adjustments that are likely to define the
industry for the next two decades. Good risk
management, continuous market studies, and diversification in exposure will remain the
keys to success
as the energy sector evolves.
Disclaimer: Trading involves risks and may not be
suitable for all investors. Use your expertise wisely and evaluate all
associated risks before making an investment decision.
Octa is an international
broker that has been providing online trading services worldwide since 2011. It
offers commission-free access to financial markets and various services used by
clients from 180 countries who have opened more than 52 million trading accounts.
To help its clients reach their investment goals, Octa offers free educational
webinars, articles, and analytical tools. The company is involved in a
comprehensive network of charitable and humanitarian initiatives, including the
improvement of educational infrastructure and short-notice relief projects
supporting local communities. Since its foundation, Octa has won more than 100 awards, including the
‘Most Reliable Broker Global 2024’ award from Global Forex Awards and the ‘Best
Mobile Trading Platform 2024’ award from Global Brand Magazine.
