EIA Lifts 2025 Brent Crude Price $3 on Geopolitical Worries


   
Miguel E. Andujar
DTN Refined Fuels Market Reporter

    

   DAVENPORT, FL (DTN) ---- The Energy Information Administration raised its 
estimates for Brent crude average prices for 2025 due to heightened 
geopolitical risk premiums following escalated tensions over Iran's nuclear 
program. The increase reflects higher near-term prices tied to global 
uncertainty, although the agency still expects inventory builds will put 
downward pressure on prices over the forecast period.

   In its monthly Short-Term Energy Outlook released today, the EIA estimates 
an average price for Brent at $69 bbl in 2025, up from a previous forecast of 
$66 bbl, and $58 bbl for 2026, slightly lower than the prior estimate of $59 
bbl. This month's outlook was completed before OPEC+ announced on July 5 it 
would raise production targets for August, with those targets exceeding the 
assumptions used in the current forecast. However, the EIA still expects the 
group to produce below current target levels to limit inventory growth and 
support prices.

   The EIA did not revise its West Texas Intermediate forecast but indicated 
the WTI price would follow a similar trajectory as Brent, averaging near $53 
bbl by end-2026.

   The agency forecast U.S. crude oil production will decline from an all-time 
high of just over 13.4 million bpd in the second quarter 2025 to less than 13.3 
million bpd by the fourth quarter 2026, primarily due to slowing drilling and 
completion activity in response to lower prices. On an annual basis, production 
is expected to average 13.4 million bpd in both 2025 and 2026.

   Global oil inventories are projected to build steadily over the remainder of 
the year, with rising supply and moderating demand contributing to the 
increase. Inventory builds are expected to average 0.8 million bpd in 2025, 
moderating to 0.6 million bpd in 2026 as slower supply growth and stronger 
consumption begin to rebalance the market.

   Significant uncertainty remains around the global macroeconomic outlook, 
trade negotiations, and geopolitical tensions. The EIA cited sanctions on 
Russia, Iran, and Venezuela, as well as potential supply disruptions from 
events such as wildfires in Canada and instability in Libya, as key risks 
contributing to a wide range of potential price outcomes.

   The outlook shows global liquid fuels consumption increasing by 0.8 million 
bpd in 2025 and 1.1 million bpd in 2026, driven largely by non-OECD countries. 
The EIA expects India and China to continue leading global growth in 
transportation fuel demand over the forecast period.




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