As of early April 2025, the oil market has been shaped by a combination of geopolitical developments, OPEC+ decisions, and shifting global demand expectations.
The International Energy Agency’s (IEA) Oil Market Report from March 2025 (the latest fully detailed monthly report available before April) offers a solid foundation. It indicated that global oil demand growth was expected to accelerate to just over 1 million barrels per day (mb/d) in 2025, up from 830 thousand barrels per day (kb/d) in 2024, reaching a total demand of 103.9 mb/d. Asia, particularly China, was projected to drive nearly 60% of this growth, fueled primarily by petrochemical feedstocks, though overall demand for refined fuels in China has plateaued.
On the supply side, world oil supply in February 2025 stood at 103.3 mb/d, with a modest increase of 240 kb/d from the previous month, led by OPEC+ contributions. Notably, Kazakhstan hit an all-time high due to the Tengiz field ramp-up, while Iran and Venezuela increased output despite looming tighter sanctions. Non-OPEC+ countries, especially the United States, Canada, Brazil, and Guyana, were forecasted to be the largest sources of supply growth in 2025, with the U.S. maintaining record-high production levels. However, proposed U.S. tariffs on Canada and Mexico (set to take effect April 1, 2025) introduced uncertainty, as these countries supplied roughly 70% of U.S. crude imports in the prior year.
Prices in early 2025 reflected a complex balance. The IEA noted Brent crude futures trading around $75/bbl in February, with a brief rally to $82/bbl in early January due to sanction-related supply concerns, followed by a retreat as trade tensions escalated. The U.S. Energy Information Administration (EIA) in its January 2025 Short-Term Energy Outlook forecasted Brent prices to average $74/bbl in 2025, down from $81/bbl in 2024, citing strong non-OPEC+ production growth and slower demand increases. This softening was evident in market signals like narrowing WTI prompt spreads, suggesting weaker fundamentals.
New U.S. sanctions on Russia and Iran (announced January 10, 2025) aimed to curb their oil revenues but hadn’t significantly disrupted flows by March. Meanwhile, OPEC+ delayed unwinding voluntary cuts of 2.2 mb/d, with plans to begin phasing them out from April 2025, though the group signaled flexibility to pause or reverse this based on market conditions. The IEA estimated a potential supply overhang of 600 kb/d in 2025, which could rise to 1 mb/d if OPEC+ fully unwinds cuts without addressing overproduction by some members.
In summary, the last comprehensive analysis before April 7, 2025, paints a picture of an oil market tilting toward oversupply, with demand growth moderating and non-OPEC+ production surging. Prices faced downward pressure despite geopolitical risks, hovering in the mid-$70s/bbl range, with trade wars and sanctions adding layers of uncertainty.
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