Crude oil prices in 2025: Navigating the choppy waters of global energy markets

Since mid-June 2025, the price of crude oil on the NYMEX has fluctuated within a narrow range of $60-$70 per barrel, reflecting a market caught between oversupply concerns and geopolitical tensions. Over the past three years, prices have largely remained below $90, a stark contrast from the volatility in the early 2020s. This unrest is caused by a complex interplay of supply and demand dynamics, regional conflicts and changing trade policies.

Performance of NYMEX, Brent and MCX Crude

NYMEX WTI oil has been hovering around $61-$65 in recent months, while Brent oil has been trading slightly higher, between $65-$69. On the MCX, Indian crude futures mirrored global trends with prices stabilizing around ₹5,400 per barrel. The narrowing spread between Brent and WTI reflects a global market increasingly influenced by US exports and lower geopolitical premiums.

Global supply-demand dynamics

The International Energy Agency (IEA) forecasts that global oil supply will reach 106.9 million barrels per day (mb/d) in 2025, exceeding demand, which is expected to rise modestly to 103.9 mb/d. This surplus is driven by increased production from non-OPEC countries such as the US, Brazil and Guyana, while demand growth remains tepid due to economic slowdowns in China and Europe.

Russian supply and sanctions impact

Russia continues to produce about 10.2 million barrels per day, but sanctions are starting to bite. Ukrainian drone attacks on export terminals and refineries have disrupted flows, while Western sanctions have limited access to advanced drilling technology. Despite these challenges, Russia maintains exports to India and China, often through shadow fleets and reduced prices. However, refining capacity has fallen by more than 10% and export revenues have fallen by 14% year-on-year.

Offer from the Middle East and the role of Iran

Middle Eastern producers, especially Saudi Arabia and the UAE, have ramped up production to regain market share. Despite renewed UN sanctions, Iran continues to export more than 1.5 million barrels per day, mainly to China. Iranian crude is often transported through shady fleets and branded at Chinese ports, bypassing sanctions. This flow remains critical to China’s refining sector and global supply stability. At the same time, Nigeria has increased production to support domestic energy needs, contributing to OPEC+ supply growth. Benefiting from relaxed sanctions, Venezuela has stabilized production at around 700,000 to 800,000 barrels per day, while exports flow to Asia and Latin America. Meanwhile, both countries remain vulnerable to infrastructure and political risks.

US manufacturing and export trends

The US has reached a record high of 13.53 million barrels per day in crude oil production, with exports averaging 4.1 million barrels per day. Domestic demand remains strong at 20.5 million barrels per day, but refinery closures and increased distillate exports have shrunk inventories. The US is also expanding LNG exports, strengthening its role as a global energy hub.

Chinese demand for oil and strategic supplies

China’s oil demand is expected to rise 1.1% in 2025, driven by petrochemical growth, even as fuel consumption in the transportation sector continues to plateau. The country has been aggressively stockpiling crude oil, adding more than 530,000 barrels of reserves daily. This strategic build-up has helped stabilize global prices and offset weak demand elsewhere.

Tariff effects on the global oil supply chain

The US tariff increases in 2025 – some as high as 25 to 50% – have disrupted global oil trade. India, which faces higher tariffs over its Russian oil purchases, has started diversifying imports from the US, Brazil and West Africa. The tariffs have also increased shipping costs and complicated refinery logistics, especially for countries that rely on specific crudes.

The Indian demand and Russian oil strategy

Indian oil demand continues to rise, with imports averaging 5.2 million barrels per day, of which 35 to 40% come from Russia. Despite US pressure and tariffs, India is prioritizing affordable energy and using competitively priced Russian crude to control inflation and trade deficits. Strategic reserves and refining exports to G7 countries further strengthen Indian energy diplomacy.

Price outlook and demand forecasting

Looking ahead, crude oil prices are expected to remain in the $60 to $70 range through the end of the year, with possible declines below $60 if oversupply continues. Demand growth is likely to be led by emerging markets, but macroeconomic headwinds and energy transitions could limit upside potential. The IEA forecasts Brent to average $68.64 in 2025, with a possible fall to $66 in 2026.

(The author is Head of Commodity Research, Geojit Investments)