“Oil prices set for biggest annual drop since 2020 – ReutersOil prices were little changed on Wednesday but are expected to fall by more than 15% over 2025. This is due to fears of
oversupply, despite wars, tariffs, and sanctions.
”, — write: unn.ua
DetailsBrent crude futures, which have fallen by almost 18% – the most significant annual percentage decline since 2020 – are heading for a third consecutive year of losses, which would be the longest losing streak ever. US West Texas Intermediate crude is expected to fall by 19% year-on-year.
BNP Paribas commodity analyst Jason Ing expects Brent prices to fall to $55 a barrel in the first quarter, then recover to $60 a barrel by the end of 2026, as supply growth is expected to normalize while demand remains at previous levels.
“The reason we are more pessimistic than the market in the short term is that, in our opinion, US shale producers have been able to hedge at high levels,” he said.
“Thus, supply from shale producers will be more stable and insensitive to price fluctuations,” he noted.
Average prices for both benchmarks in 2025 are the lowest since 2020, LSEG data showed. Brent crude futures rose 9 cents to $61.42 a barrel by 10:30 GMT (12:30 Kyiv time), while US West Texas Intermediate rose 10 cents to $58.05.
US oil and fuel inventories rose last week, market sources said, citing American Petroleum Institute data released on Tuesday.
Oil markets showed a strong start in 2025, as former US President Joe Biden ended his term by imposing tougher sanctions against Russia, disrupting supplies to major buyers – China and India.
The intensification occurred in Russia’s war against Ukraine, when drones hit Russian energy infrastructure, and the 12-day Iran-Israel conflict in June threatened shipping in the Strait of Hormuz, a key route for seaborne oil shipments worldwide, which pushed up oil prices.
In recent weeks, geopolitical tensions have been exacerbated by the crisis in Yemen between leading OPEC producers – Saudi Arabia and the United Arab Emirates, as well as US President Donald Trump’s order to block Venezuelan oil exports and his threat of a new strike on Iran.
However, prices fell after OPEC+ accelerated production growth this year, and amid concerns about the impact of US tariffs on global economic growth and fuel demand.
The Organization of the Petroleum Exporting Countries and its allies suspended oil production increases in the first quarter of 2026 after releasing about 2.9 million barrels per day to the market since April. The next OPEC meeting will be held on January 4.
Most analysts expect supply to exceed demand next year, with estimates ranging from 3.84 million barrels per day forecast by the International Energy Agency to 2 million barrels per day forecast by Goldman Sachs.
“If the price really falls significantly, I think you’ll see some cuts (from OPEC+),” said Martin Ratz, global oil strategist at Morgan Stanley. “But it probably needs to fall significantly more – perhaps to a level slightly above $50.”
“If today’s price simply holds after the first quarter pause, they will likely continue to unwind those cuts,” he pointed out.
John Driscoll, managing director of consulting firm JTD Energy, expects geopolitical risks to support oil prices despite fundamental factors pointing to oversupply.
“Everyone says things will get worse by 2026 and even beyond,” he said. “But I wouldn’t ignore geopolitics, and the Trump factor will play its part because he wants to be involved in everything.”
Discounts on Russian oil approached historical highs, but tax breaks help exporters – Reuters31.12.25, 08:30 • 2612 views