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Brent under pressure: A rebound may be coming

In 2025, oil prices have come under significant pressure, falling more than 21% since the beginning of the year — from $75 to around $59 per barrel of #BRENT. This decline was driven by increased production from OPEC+ countries, weak global demand (particularly in Asia), heightened economic risks due to trade disputes, and rising output from non-OPEC producers such as the U.S. and Brazil. Together, these factors created an oversupply amid stagnant demand.

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Currently, the oil market continues to be shaped by a range of influencing factors. While accurately predicting prices remains a challenge, several key drivers are likely to steer oil price movements in the near term. Here’s a look at the main bullish and bearish factors:

• Geopolitical tensions (Bullish driver): Ongoing or emerging conflicts in key oil-producing regions (such as the Middle East and Eastern Europe) raise concerns about potential supply disruptions. Even without actual disruptions, the perceived risk leads traders to factor in a “risk premium,” pushing prices higher. Any escalation could trigger sharp price spikes.
  
  
• OPEC+ policy (Bullish/neutral driver): The alliance’s production decisions remain a major influence on supply. If OPEC+ maintains or tightens its current output cuts to balance the market or target price levels, this will support price growth or at least stability. Conversely, quota breaches or output increases would weigh on prices.
  
  
• Global economic outlook (Bearish/bullish driver): The trajectory of global economic growth directly affects oil demand. Signs of GDP slowdowns in major economies (U.S., China, EU) tend to weaken demand and drag prices lower. On the other hand, if economic growth proves more resilient than expected, it would support oil demand and prices. Uncertainty over the growth path of many countries persists in 2025.
  
  
• Non-OPEC+ output growth (Bearish driver): Countries outside of the OPEC+ alliance — including the U.S. (shale), Brazil, Guyana, and Canada — continue expanding their production. Significant output increases from these nations could offset OPEC+ efforts and lead to market oversupply, applying downward pressure on prices.
  
  
• Energy transition and underinvestment (Medium-term bullish driver): ESG pressures, the global shift toward renewables, and uncertainty around long-term fossil fuel demand have led to underinvestment in new oil exploration and development. If existing capacity declines faster than new projects come online, a structural supply deficit could emerge, supporting higher prices even amid the energy transition.
  
  

FreshForex analysts believe that, given ongoing geopolitical risks, strict OPEC+ policies, and underinvestment in production, the oil market is nearing a potential upward reversal. A modest uptick in demand or increased tension could be enough to put oil back on a growth trajectory.

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