Brent Crude Oil in 2025: The Foundation of Our Lifestyle
Brent crude, a major global benchmark for oil pricing, originates from the North Sea and represents a blend of multiple oil grades. It serves as a pricing standard for over two-thirds of the world’s internationally traded crude oil, influencing energy markets, economic policies, and geopolitics. Its pricing is often used to gauge global economic health, as crude oil is a key driver of industrial activity and energy consumption.
This makes Brent crude an especially attractive trading instrument due to its high liquidity and sensitivity to macroeconomic events. Whether prices surge due to geopolitical tensions or dip from oversupply concerns, the constant flux in Brent’s value makes it a key asset for market participants in 2025.
Historical Brent crude price drivers
Like every other commodity, Brent’s price is determined by a myriad of factors, all of which can be reduced to supply and demand dynamics and geopolitics.
Oil demand
It won’t be an overstatement to say that the modern economy is completely based on oil consumption. In fact, since 2005 oil demand has increased by 25%, from 83.65 million barrels per day (bpd) to 104.46 million bpd projected by the end of 2024.
The top 3 oil consumers as of today are the United States (18.98 million bpd), China (16.57 million bpd) and India (5.44 million bpd) which, all together, account for more than a third of global crude oil demand. Economic data and political events in these countries often impact oil prices, with market participants assessing whether consumption is likely to increase or decrease.
As shown by the chart above, oil demand growth never slowed in the past 20 years, except during the aftermath of the 2008 financial crisis (from 85.9 to 84.8 million bpd in the 2008–2010 period) and during the COVID pandemic in 2020, when global production stopped for almost a year. Consequently, oil consumption is tightly tied to economic expansion, slowing when global macroeconomic conditions get worse.
Another factor negatively affecting oil demand is the recent rise of non-fossil fuels and renewables. The increasing appeal for these types of energy sources directly originates from the global need to reduce pollution, while diversifying local production and addressing the growing need to improve domestic energy security policies.
In any case, the Organization of Petrol Exporting Countries (OPEC) expects oil to maintain its dominant share in energy demand until at least 2045.
Oil supply
On the supply side, OPEC+ (OPEC countries + Russia) decisions play a major role in determining oil price dynamics, with the organization’s share of global oil output at 36% in 2023. When the group gathers to agree on oil production quotas, markets often react with acute volatility.
The main “adversary” of this organization is the United States. The country is the biggest oil producer, also due to shale oil extracted by fracking (19.358 million bpd), followed by Saudi Arabia (11.389 million bpd) and Russia (11.075 million bpd).
As fuel prices are a key concern for its citizens, the United States historically tries to keep oil prices lower, while OPEC+ countries plan their state budgets based on specific crude prices, and do all that is in their power to push them as close as possible to the target throughout the year.
What strongly affects oil price dynamics are supply-chain disruptions, which can be caused by natural events (like hurricanes or earthquakes), production halts for problems at drilling sites or refineries, and geopolitical unrest, especially in the Middle East.
Geopolitics
Wars have historically caused sharp increases in oil prices due to supply disruptions and heightened geopolitical risk. For instance, during the 1973 Yom Kippur War, the Arab oil embargo quadrupled prices from around $3 to $12 per barrel, triggering a global energy crisis.
Most recently, the 2022 Russia-Ukraine War caused prices to soar to $130 per barrel in March 2022, the highest since 2008, as sanctions and export disruptions from one of the world’s largest producers created fears of global shortages. Each of these conflicts underscores the sensitivity of oil markets to geopolitical instability and the critical role of crude oil in global economies.
On average, Brent crude rose 171% from the start of the conflict to its peak, before tensions quelled and prices shot back down.
Brent’s historical high, however, was reached not on conflicts, but on strong demand confronting weakening supply in 2008, before tumbling down almost 70% during the Global Financial Crisis. This further underlines that wars only play a role from the standpoint of tightening supply, giving economic factors of production and consumption the leading role in determining oil prices.
Analysis of XBRUSD 2024 dynamics
To state that oil has had a rough year would be an exaggeration, given the overwhelming volatility of this commodity. However, fluctuations in price have not been extreme, even considering that the Russia-Ukraine conflict hasn’t stopped escalating and the Middle-East is still far from seeing all hostilities cease.
In the first half of the year geopolitics was at the center of the stage. In April 2024, Brent crude touched its peak for the year, somewhere around $90/b. This was caused by Ukrainian drone attacks on Russian oil refineries and Iran vowing to take revenge on Israel after its strikes killed high-ranking officials in the Iranian embassy in Damascus, Syria.
Later, however, prices continued last year’s bearish trend, as economical data gained more importance throughout the second and third quarters. In June, Brent showed a local low, pressured by weakening demand, ebbing conflicts, and worsening China’s economic conditions. Moreover, at the beginning of the month, OPEC+ members decided to roll back production cuts, starting in October 2024. All of those signs were pretty bearish for crude oil.
As such, after briefly rebounding in July on falling US oil inventories and Russian tycoons Lukoil and Rosneft cutting production, Brent continued to slide down on global economic worries, with July’s NFP data igniting fears of a recession (and thus fears of a heavily weakened oil demand).
In mid-September, however, China announced strong stimulus measures for its wavering economy, boosting the Chinese stock market. Since China is one of the leading oil consumers, Brent crude shot back up, reaching $81/b on October 7.
After hopes for a more defined measures package faded, the Hang-Seng index ticked down, losing 60% of its earlier gains. Having a strong correlation with Chinese economic sentiment, Brent soon followed down.
At the end of November, Brent traded around $73/b, reacting neither to further escalation and threats of a nuclear conflict between NATO and Russia nor to a ceasefire between Lebanon and Israel. This fact points out that economic drivers have completely taken over broader geopolitical unrest in the latest dynamics of Oil prices.
In the chart below we can see a strong Brent crude correlation with both the S&P 500 and the Hang Seng Index (HSI).
XBRUSD in 2025: Possible scenarios
The slowdown in industrial and manufacturing activity in China, the world’s largest oil consumer, is a significant factor restraining demand. Largely based on that, oil analysts and agencies such as the US Energy Information Administration (EIA) and OPEC+ have revised global demand growth forecasts downward, reflecting a weaker-than-expected recovery in the Chinese economy.
With demand growth projected between 1 to 1.5 million bpd for 2025, the recovery pace remains moderate and susceptible to further economic instability. Based on the dynamics of crude oil prices in 2024, we can also assume that geopolitical events are becoming a less impactful upside factor, giving traders interesting possibilities to open more shorts.
In 2025, we expect the realization of one of the following scenarios.
1. Wars freeze by Trump’s efforts, the trade war doesn’t impact China’s economic potential. Global economic growth resumes strongly.
Given the recent US administration’s efforts to support Ukraine and elevate global escalation, with harsher and harsher comments on the possibility of a NATO-Russia conflict being ever more real and present, we see the stabilization of the geopolitical landscape as highly unlikely.
However, in case the Trump administration can come to terms with one of its geopolitical rivals and the Israeli-Palestinian conflict also cools down, oil prices can experience massive downward momentum.
Moreover, Trump’s pledge to impose tariffs on China is leaving market participants almost no hope for the best. On the other hand, promises are just promises, until plans are implemented. Depending on the size of the tariffs imposed, the effect on the Chinese economy may not be that disruptive.
If China were to tackle its inner core problems, such as the effects of a still deflating housing bubble, oil consumption could regain pace, and thus moderate the sharp fall caused by most of the wars ending.
In this unlikely scenario, Brent prices could fall to $50–$60/b.
2. Trump manages to stop wars but initiates a harsh trade war with China. OPEC unwinds production cuts.
This one is the worst forecast for crude oil in 2025.
If the Trump administration manages to ease tensions with Russia and the Israeli-Palestinian conflict subsides, as said in the scenario above, oil prices could face significant downward pressure.
Coupled with the 100% probable trade war with China, this turn of events is capable of pulling Brent crude prices into the ground. Regarding the trade war, it’s the scale of it that matters to oil markets. Trump looks certain and unmovable on the necessity of strangling Chinese exports, to boost US-made industrial production.
Given the crisis the Chinese economy is going through for the fourth year now, a trade confrontation with the US promises to cripple an already weakening economy. As manufacturing production slows and industries close, the lion’s share of crude oil consumption will diminish in size, sending Brent crashing down.
Moreover, given that non-OPEC countries, such as the US, Canada, and Brazil are planning to slowly increase their oil production output, OPEC+ may be forced to unwind its cuts faster than forecasted. This would be meant to defend the constantly lowering production market share of the cartel at the cost of losing profits due to lower oil prices.
Considering how Trump is ready to set a “drill baby drill” policy for US producers and cut energy prices in half, this turn in OPEC policy is becoming far more probable by the day.
In the end, if everything said above happens, Brent crude oil prices will be subject to a steep fall, possibly reaching $30-$40/b.
3. Conflicts escalate, trade war infuriates, too high rates for too long suffocate economic growth
In case wars do not cease and instead escalate, the geopolitical factor can become dominant once again. The risk of supply chains being disrupted is viewed as low by market participants at the time being. Nevertheless, in case things get out of hand and Iranian petrol refineries or oil-producing sites and strategic reserve silos are targeted (similarly to this year when Ukraine hit Russian refineries), oil prices could shoot back up.
In any case, they probably won’t remain at a newly established high for a long time, given the global slowing economic growth and the Fed’s reluctance to lower rates quickly. Since demand and producer activity drive energy consumption, if tight monetary conditions were to persist, there would be little Brent prices could do but not fall.
A bloody trade war could bring many Chinese industries to heel, sparking retaliation measures by the Chinese government and further worsening global economic conditions.
If in this scenario OPEC members were to cut their production output again, they would likely support prices, but at the cost of losing a sizable part of their market share.
In the end, in this scenario, there are many incognitas, but an average $70/b price is fair to be expected for Brent throughout the year, supported almost solely by higher tension in the global political arena.
4. Recession in the US amid trade and armed conflicts
Global conflicts could mitigate the slowing demand and increasing supply risks but will be completely offset in case a recession is bound to happen. In 2008 Brent lost 70%, in 2020 — almost 90%. In case of a recession in the US and continued problems with China, there are lots of options to choose from, when guessing the bottom.
Conclusion
Our analysis highlights that oil prices will be shaped by economic conditions, geopolitical developments, and demand-side factors. While conflicts like Israel-Palestine and US-Russia relations may cause short-term volatility, broader trends reflect slowing growth in key consumers like China and US trade policies.
At the same time, OPEC+ strategies and the balance of supply resilience and demand recovery will also play a role. Geopolitical stability and economic recovery could lower prices while persistent conflicts or disruptions may trigger spikes.
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