Oil prices slipped more than 10 per cent in 2025, with Brent heading for its longest stretch of annual losses ever, as supply outpaced demand in a year marked by wars, higher tariffs and OPEC+ output and sanctions on Russia, Iran and Venezuela.
Brent crude futures, down nearly 18 per cent – the most substantial annual percentage decline since 2018 – are on track for a third straight year of losses. The March contract, which expires on Wednesday, fell 6 cents to $61.27 a barrel at 0147 GMT.
US West Texas Intermediate crude was at $57.90, down 5 cents, and was headed for a 15 per cent annual decline.
Oil markets had a strong start to 2025 when former President Joe Biden ended his term by imposing tougher sanctions on Russia, disrupting supplies to top buyers China and India.
The war in Ukraine intensified when Ukrainian drones damaged Russian energy infrastructure and disrupted Kazakhstan’s oil exports and the 12-day Iran-Israel conflict in June threatened shipping in the Strait of Hormuz, a key oil chokepoint, which fanned oil prices.
Adding to geopolitical tensions, top OPEC producers Saudi Arabia and the United Arab Emirates are engaged in a conflict over Yemen and US President Donald Trump has ordered a blockade on Venezuelan oil exports and threatened another strike on Iran.
But prices cooled after OPEC+ accelerated its output increases this year and as concerns about the impact of US tariffs weighed on global economic and fuel demand growth.
OPEC+
The Organization of the Petroleum Exporting Countries and its allies have paused oil output hikes for the first quarter of 2026 after releasing some 2.9 million barrels per day into the market since April. The next OPEC+ meeting is on January 4.
Most analysts expect supply to exceed demand next year, with estimates ranging from the International Energy Agency’s 3.84 million barrels per day to Goldman Sachs’ 2 million bpd.
“If the price really has a substantial fall, I would imagine you will see some cuts (from OPEC+),” said Martijn Rats, Morgan Stanley’s global oil strategist. “But it probably does need to fall quite a bit further from here on – maybe in the low $50s.”
“If today’s price simply prevails, after the pause in Q1, they’ll probably continue to unwind these cuts.”
