As someone working in the energy industry, I am often asked about the prospects of oil prices. The truth is, predicting them is anything but straightforward. Oil price forecasts are subject to a complex set of factors, including global economic conditions, political stability and geopolitical developments. Moreover, production strategies by major oil-producing nations add another layer of unpredictability.
This is especially relevant in 2025, a year that has so far been defined by uncertainty – something investors notoriously dislike. Apart from shifting dynamics with Russia’s role in global energy markets (Financial Times), industry executives are also growing increasingly cautious, particularly in light of shifting trade policies under President Donald Trump’s administration. The recent imposition of tariffs on steel and aluminum on March 12 has already raised concerns. Furthermore, Trump’s 25% tariff on Venezuelan crude, introduced on March 25, added more uncertainty to the oil market and potential supply impacts. While some believe his auto tariff announced on 26 March could boost crude as it could slow the shift to fuel-efficient cars, others argue that regardless – oil prices will not reach early 2025 highs due to ongoing policy uncertainty (Reuters). Finally, Trump’s Liberation Day announcement on April 2 about additional 10% ‘baseline’ tariff on all imports to the US are shaking up global trade further.
Overall, for oil companies, these tariffs could significantly drive up costs, especially for essential materials like steel used in drilling sites and pipeline construction. At the same time, while operating costs continue to climb, oil prices have been on a downward trend. According to industry surveys, many executives believe that for new activity to be stimulated, oil prices need to be in the $75–$80 per barrel range (Reuters). As of today – April 3, Brent crude oil is trading at approximately $70.68 per barrel, and WTI crude oil at around $67.38 per barrel (FT Markets), falling short of the threshold executives believe is necessary to stimulate new activity.
The US Energy Information Administration (EIA) forecasts Brent crude prices will average $74 per barrel in 2025, down from $81 in 2024, due to increased production and slower demand. Prices are expected to fall further to $66 in 2026 (EIA). Similarly, Goldman Sachs has revised its forecast, projecting $78 per barrel in 2025 and $73 in 2026, citing slower demand and higher supply from OPEC+ countries (Reuters).
Overall, with no clear direction on trade policies and ongoing economic uncertainty, the industry is left searching for stability. For now, all eyes remain on geopolitical developments, hoping for signs of clarity in an increasingly unpredictable market.
