Oil Prices Expected to Stay Under $70 for 2025

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Despite heightened tensions in the Middle East, oil prices are likely to remain capped below $70 per barrel for the rest of the year amid ample supply and uncertainties about demand.

Unless actual supply disruptions occur in and around the hotspots in the Middle East, the price of oil will be a function of supply and demand, analysts and investment banks say.

Growing supply from the OPEC+ group, although not as high as the monthly headline figure of 411,000 barrels per day (bpd) suggests, is set to create an oversupply on the market going into autumn, even if summer demand holds strong. On the demand side, peak summer travel season may justify higher supply, but lingering trade and economic uncertainties may cap upside to prices.

As a result, most analysts expect oil prices to hover around the current levels in the mid-$60s per barrel and average below $70 a barrel for 2025.

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“In order for oil prices to return to what we think is the $70s, kind of normal price, you need the market to really rebalance,” Thummel said.

“What that means is either oil production in other locations is going to fall, and, or effectively, demand for oil is probably going to rise more than what people expect in the second half of the year.”

According to Ole Hansen, Head of Commodity Strategy at Saxo Bank, crude oil may face headwinds in the second half of the year amid rising output and economic growth concerns.

“OPEC8+ continues to ramp up production in an effort to punish overproducing quota cheaters, and to reclaim market share from higher-cost producers which may eventually have to dial down production amid lower price expectations,” Hansen said in a weekly commodities commentary.

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The oil market is full of uncertainties, but current supply and demand balances point to an oversupply and subdued oil prices in the coming months, barring a supply disruption in the Middle East.

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