In its February Short-Term Energy Outlook (STEO), released on Tuesday, the U.S. Energy Information Administration (EIA) updated its projections for the Brent oil spot price in 2025 and 2026.
The EIA now expects the Brent spot price to average $74.50 per barrel in 2025 and $66.46 per barrel in 2026. These figures are slightly higher than the January forecast, which had predicted an average of $74.31 per barrel for 2025 and $66.46 per barrel for 2026.
For the first quarter of 2025, the EIA forecasts a Brent price of $77.13 per barrel, with the price expected to decrease gradually through the year—$75 per barrel in the second quarter, $74 per barrel in the third, and $72 per barrel in the fourth quarter. The January outlook had projected similar prices for the first three quarters, with a slightly higher $76.34 per barrel expected in the first quarter of 2025.
The EIA also reported that the average price of Brent crude oil was $79 per barrel in January, which marked a $5 increase from December. The agency attributed this price rise to the announcement of new sanctions on Russia’s oil exports on January 10. However, prices started to fall later in the month as concerns over weak global oil demand and oversupply resurfaced.
By February, Brent prices were around $76 per barrel, similar to the start of January. The EIA also pointed to recent trade developments, including the imposition of tariffs by President Trump on imports from China, Canada, and Mexico. The tariffs on imports from Mexico and Canada were delayed by 30 days, meaning their effects are not reflected in this forecast.
While the EIA acknowledges the uncertainty created by these tariffs and sanctions, it does not expect them to significantly disrupt global oil supply at this time. The agency noted that the sanctions on Russia are expected to slightly reduce Russia’s oil production, but they will mainly cause shifts in global oil trade flows without drastically affecting global supply or oil prices.
The EIA’s outlook for global oil inventories remains cautious, predicting a decline of 0.5 million barrels per day in the first quarter of 2025, driven by OPEC+ production cuts. However, the agency expects inventories to start increasing once OPEC+ begins raising production in April 2025. The EIA projects global oil inventories will rise by 0.9 million barrels per day in the second half of 2025 and by 1 million barrels per day in 2026.
As global inventories grow and demand remains weak, the EIA anticipates downward pressure on oil prices. The agency forecasts Brent prices will decrease to $72 per barrel by December 2025, with an average of $74 per barrel for the year. Prices are expected to fall further in 2026, averaging $66 per barrel.
Despite these projections, the EIA warned that significant uncertainty remains in the oil market, driven by factors like sanctions on Russia, trade tariffs, and potential sanctions on Iranian oil. These variables are likely to influence oil prices throughout the forecast period.
Other industry analysts have offered slightly different forecasts. JPMorgan’s Commodities Research team expects Brent prices to average $73 per barrel in 2025 and $61 per barrel in 2026. Meanwhile, BMI, part of the Fitch Group, has projected an average Brent price of $76 per barrel for 2025 and a price of $75 per barrel for the following years through 2029. A Bloomberg consensus also suggests that Brent will average $73 per barrel in 2025, falling to $67 per barrel by 2029.
The outlook remains fluid, with many factors contributing to the uncertainty in global oil markets.
Related Topics:
- Large Rise in Crude Inventories Puts a Ceiling on Oil Prices
- Africa’s Largest Refinery May Reach Full 650,000-Bpd Capacity in 30 Days
- UAE and Saudi Arabia Take the Lead in Middle East Energy Transition