Global oil markets

Global oil prices and inventories
The Brent crude oil spot price averaged $74 per barrel (b) in December, $4/b lower than in the same month in 2023. For all of 2024, the Brent price averaged $81/b and in 2023 averaged $82/b. Following some initial upward price pressure in early 2025, we expect that crude oil prices will generally decline from mid-2025 through the end of 2026 as growth in global oil production outpaces growth in oil demand. We forecast that the Brent price will average $74/b this year and $66/b in 2026.

In our forecast, increases in oil prices in the coming months are largely a result of the recent extension of OPEC+ production cuts, which we expect will lead to global oil inventory withdrawals of 0.5 million barrels per day (b/d) on average in the first quarter of 2025 (1Q25). We expect that falling global oil inventories will increase crude oil prices $2/b from their December average to an average of $76/b in 1Q25.

However, as stated in their agreement, we expect that OPEC+ will begin to increase production by 2Q25. We also expect that production growth from outside of OPEC+ will continue, though at a slower pace than in 2023 and 2024. This production growth, coupled with relatively weak growth in oil demand growth will cause global oil inventories to accumulate from mid-2025 through 2026. Global inventories increase by an average of 0.3 million b/d in 2025 and by 0.7 million b/d in 2026. Increasing inventories put downward pressure on prices through the remainder of our forecast. As a result, we expect the average Brent crude oil price will fall to $72/b in December 2025, before falling to an average of $66/b in 2026.

Significant uncertainty remains within our price forecast. While we assess that OPEC+ producers will likely continue to limit production mostly in line with recently announced targets through 2026, the potential for weakening commitment among OPEC+ producers to continue restraining production adds downside risk to oil prices. Secondly, although no oil supplies have been directly affected thus far, tensions remain high around the Middle East, and future developments have the potential to influence oil prices. Lastly, our global oil consumption forecast shows growth that remains less than its pre-pandemic average, but changes in economic growth and other factors could significantly alter the trajectory compared with our forecast.

Global oil production and consumption
Global liquid fuels production growth in our forecast increases in 2025 and 2026 due to a combination of the relaxation of OPEC+ production cuts and further growth from countries outside of OPEC+. Global liquid fuels production increases by 1.8 million b/d in 2025, up from growth of 0.5 million b/d in 2024. Following an annual decline of 1.3 million b/d in 2024, we expect growth of 0.2 million b/d in 2025 from OPEC+ producers, before production grows by 0.6 million b/d in 2026 as voluntary production cuts unwind but output remains below the group’s current targets in an effort to avoid significant inventory increases.

We still expect growth in oil production during 2025 to be led by countries outside of OPEC+, increasing by 1.6 million b/d before slowing to growth of less than 0.9 million b/d in 2026. Although production growth outside of OPEC+ is expected to still be driven by the United States, Canada, Brazil, and Guyana in 2025. Except for Brazil, growth slows for all those countries in 2026. We expect production in Canada to see continued growth largely because the Transmountain Expansion (TMX) project increased oil takeaway capacity for export markets, while Brazil and Guyana are expected to start new offshore production facilities in 2025. Notably, we forecast that growth in liquids production in the United States will slow to 1%, or 0.3 million b/d, in 2026 as operators reduce activity in response to low WTI prices.

Global growth in oil consumption in our forecast continues to be slower than the pre-pandemic trend. In our forecast, global liquid fuels consumption increases by 1.3 million b/d in 2025 and by 1.1 million b/d in 2026, compared with estimated growth of 0.9 million b/d in 2024 and a pre-pandemic 10-year average (2010–2019) of 1.5 million b/d.

Non-OECD countries drive almost all global oil consumption growth in our forecast. Much of this growth is in Asia, where India is now the leading source of global oil demand growth in our forecast and one of the few places growing faster than its pre-pandemic trend. We expect liquid fuels consumption in India will increase by 0.3 million b/d in both 2025 and 2026, compared with an increase of 0.2 million in 2024, driven by rising demand for transportation fuels. We forecast China’s liquid fuels consumption will grow by 0.2 million b/d in both 2025 and 2026, up from an increase of less than 0.1 million b/d in 2024, as economic stimulus efforts drive higher demand growth. We forecast that OECD oil consumption will be relatively unchanged across 2025 and 2026, with a 0.2 million b/d increase in 2025 before decreasing slightly in 2026.