Brent crude prices have been on a steady decline since peaking at $128 per barrel in 2022. Analysts at Bank of America (BofA) predict that this downward trend could persist into 2025 and beyond. In a recent note to clients, BofA estimated that Brent will average approximately $75 per barrel in 2025 and $73 in 2026, citing geopolitical, trade, and supply uncertainties as key factors keeping prices under pressure.
Key Market Catalysts for Oil Prices
Several factors are influencing Brent crude’s price trajectory:
Russian Oil Sanctions & Potential Supply IncreaseWestern sanctions on Russian oil exports have played a role in supporting Brent prices. However, recent discussions between Moscow and U.S. officials regarding a possible resolution to the war in Ukraine have raised speculation that sanctions could be lifted. If restrictions ease, a surge in Russian crude supply could flood the market, leading to additional downward pressure on prices.
Trump’s Tariff Plans & Demand ConcernsU.S. President Donald Trump’s plans to impose sweeping tariffs on key trade partners, including China, Mexico, and Canada, add another layer of uncertainty. Some analysts argue that these tariffs could dampen global economic activity and weaken oil demand, which would weigh on prices.
OPEC+ Policy Decisions & Production AdjustmentsThe Organization of the Petroleum Exporting Countries and its allies, including Russia (OPEC+), are considering whether to delay previously planned oil supply increases set for April. This comes as Trump has called for lower oil prices, but Russian Deputy Prime Minister Alexander Novak has stated that no such delay is currently being discussed.
OPEC+ is currently implementing production cuts of 5.85 million barrels per day (bpd), representing about 5.7% of global supply, to keep inventories low and maintain Brent prices above $70 per barrel. The April supply increase would roll back 2.2 million bpd of these cuts through a gradual monthly increase of 138,000 bpd, according to Reuters.
Long-Term Price Outlook & Demand Trends
BofA analysts project that Brent crude prices will range between $60 and $80 per barrel through 2030, allowing for market balance. They forecast oil demand growth to slow significantly:
2023: Demand increased by 2.3 million bpd.
2025-2026: Expected to average 1.1 million bpd.
Beyond 2026: Growth is expected to slow further, as the adoption of electric vehicles (EVs) reduces fuel consumption.
Market Implications
With Brent crude likely to face prolonged pressure, investors and industry stakeholders will closely monitor:
OPEC+ policy shifts and whether production cuts are extended or lifted.
U.S.-Russia relations and potential easing of sanctions.
The global economic impact of tariffs, particularly on industrial demand.
The pace of EV adoption and its effect on long-term oil consumption trends.
As these dynamics unfold, Brent prices may continue to experience volatility, making it essential for market participants to stay informed about evolving geopolitical and macroeconomic trends.
