Many experts believe that 2025 will be one of the toughest years for the Organization of the Petroleum Exporting Countries (OPEC). According to financial analysts at DNB Markets, OPEC is in for some serious challenges in maintaining stable oil prices.
DNB Markets has closely examined the hurdles that OPEC is likely to face. Analysts believe the risks include a potential oil oversupply, sluggish growth in global oil demand, and the consequences of the organization's decisions regarding oil production volumes.
Experts suppose that OPEC's problems are linked to the expected conditions in the raw materials market in 2025. “We expect the oil market to flip to moderate oversupply even if OPEC extends its existing production cuts," they said.
DNB Markets predicts that the supply of raw materials from non-OPEC countries will reach a new peak of 3.2 million barrels per day compared to 2023. Although this surge is expected to slacken in 2025, it will still average 1.5 million barrels per day. This scenario could unfold by the end of 2024 and in the following year.
It is anticipated that the steady increase in oil supply from non-OPEC countries, including the US and Brazil, will outpace the projected growth in global oil demand. The surplus could drop if OPEC remains stuck to its plan to lower output by 2.2 million barrels per day in 2025. According to DNB Markets forecasts, in such a scenario, Brent oil prices could shrink to $60–$70 per barrel.
As for oil demand, the outlook for OPEC countries does not look promising either. DNB Markets notes that the growth rate of global oil demand has slumped. In 2024, it increased by only 0.9 million barrels per day compared to 2.1 million barrels per day in 2023. Factors like the overall slowdown in global GDP growth and the weakening Chinese economy are influencing this trend.
Experts predict that in 2024, the growth rate of global oil demand will slow to 0.95 million barrels per day compared to 2023, and in 2025, it will further decelerate to 0.98 million barrels per day compared to 2024.
Moreover, DNB Markets believes that only significant geopolitical events could cause a substantial increase in oil prices, considering OPEC's sufficient reserve production capacity.
According to financial experts, OPEC will have to reconsider its oil production strategy. The organization might abandon its goal of increasing production in 2025. The specialists emphasize that if OPEC decides to increase production according to its plan, the oil market will face a greater surplus, leading to further price drops.
In addition, OPEC might engage in aggressive price competition, which could push oil prices below $60 per barrel.