Oil prices are expected to remain around current levels or even decrease further in 2025, according to analysts in a recent Reuters poll. Experts believe that sufficient oil supply and spare capacity within the OPEC+ group will help maintain prices in the low $70s per barrel. The group’s spare capacity of 5 million barrels per day, primarily from Middle Eastern producers, can balance supply shocks and keep prices stable. However, trade and geopolitical developments, such as tariffs on Canada, Mexico, and China, and potential easing of sanctions on Russia, are likely to add downward pressure on oil prices.

In March, oil prices declined after the Trump Administration confirmed the implementation of tariffs on Canada, Mexico, and China. These economic measures negatively impacted Wall Street, leading to significant drops in major indices like the S&P 500 and Nasdaq. Analysts suggest that tariffs could harm business growth, causing a slowdown in the economy, which would, in turn, reduce global oil demand. Some economic models, such as the GDPNow model from the Atlanta Fed, even forecast a contraction of the U.S. economy in the first quarter of 2025.

Despite these challenges, forecasts for global oil demand growth in 2025 have not been downgraded yet. OPEC expects demand to increase by 1 million to 1.4 million barrels per day. The group’s outlook remains optimistic, with plans to gradually return 2.2 million barrels per day of voluntary adjustments starting in April 2025. However, analysts caution that this gradual increase in OPEC+ supply, coupled with non-OPEC+ output growth, should prevent significant price spikes. Moreover, the ongoing U.S. "maximum pressure" campaign on Iran could be offset by weaker demand growth and potential changes in U.S. sanctions on Russia.

The market sentiment is currently risk-averse, with hedge funds and money managers reducing their bullish positions on oil futures. Selling of crude oil, particularly WTI Crude, has been aggressive in recent weeks, with net long positions dropping to the lowest level in nearly 15 years. Analysts are concerned about the impact of a potential global trade war and OPEC+ production adjustments, which have contributed to a deteriorating technical outlook for oil prices. Consequently, the market is uncertain, and oil prices are facing significant volatility.