Crude oil production will continue to outpace demand in 2025 despite OPEC+ caps on output, Kpler analyst Homayoun Falakshahi told Reuters.
Crude oil prices hit year-to-date lows on Wednesday, with Brent at $72.63 and WTI at $69.19, driven by weak demand in China and other markets.
OPEC+ delayed plans to ease production cuts, but analysts see challenges due to lost market share and declining prices.
Commodity analysts highlight trend-following strategies and potential for a short-covering rally in oil, while the return of Libyan oil adds further downward pressure on prices.
Oil prices extended gains on Thursday after the killing of a Hamas leader in Iran raised the threat of a wider Middle East conflict and concern over its impact on oil.
Crude oil prices spiked after Israel assassinated Hamas’s political leader on Iranian soil, leading to threats of retaliation from Tehran.
The ongoing conflict in the Middle East, combined with record US oil demand, has created a bullish environment for oil prices.
Early on Thursday morning, WTI was trading around $78.50 while Brent had climbed above $81.
One of the most important and significant sectors of the world economy, the oil and gas industry shapes geopolitical environments, powers society, and fuels economic expansion. Certainly, the oil and gas industry is a dominant source of energy across the globe and several oil companies supply billions of barrels of petroleum products daily to power transportation and industry.
The U.S. Energy Information Administration (EIA) forecast in its latest short term energy outlook (STEO) that U.S. crude oil production, including lease condensate, will average 13.98 million barrels per day in the fourth quarter of 2025.
The signing of a memorandum of understanding (MoU) last week between Russian state gas giant Gazprom and the Iranian National Gas Company (NIGC) to begin direct transfers of gas from Russia to Iran “will act as a revolution in the energy and industry scene of the region”, according to Iran’s Petroleum Minister, Javad Owji. Indeed, this MoU and the others that preceded it can be seen as a major stepping stone to enabling the two countries to implement their long-held plan to be the core participants in a global cartel for gas suppliers in the same mold as the Organization of the Petroleum Exporting Countries (OPEC) for oil suppliers.
Kazakhstan plans by September 2025 to offset gradually the excess volumes of oil produced in the first half of the year under the OPEC+ deal, the country’s Energy Ministry said.
Non-OPEC producer Kazakhstan, which is part of the OPEC+ output deal, raised its oil production in June, exceeding its quota under the alliance’s agreements, Reuters calculations based on data from sources showed on Wednesday.
OPEC+ has extended its production cuts totaling 3.66 million bpd until 2025.
Further production cuts by OPEC+ could impact global oil prices and economic stability, particularly affecting China and the U.S.
Prominent OPEC countries may be reluctant to risk lower oil prices, as doing so could jeopardize the budgets for their ambitious national spending programs.