Global oil prices are increasingly facing downward pressure as supply outpaces demand and traders weigh the impact of shifting geopolitical and trade dynamics.
With the summer consumption peak behind and fresh supply entering the market from Opec+ and non-Opec producers, analysts expect Brent crude and West Texas Intermediate (WTI) prices to weaken further into the final quarter of 2025 and the early part of 2026.
For consumers, lower prices may ease inflationary pressures, particularly in energy-importing nations. But for producers, the outlook underlines a prolonged period of tighter margins and heightened competition. Unless demand surprises to the upside or geopolitical disruptions persist, oil prices appear set for a gradual but sustained decline into early 2026, oil market experts say.
According to a Reuters poll of nearly three dozen economists, Brent crude is forecast to average $67.65 per barrel this year, slightly below last month’s projection of $67.84. WTI, the US benchmark, is expected to average $64.65 per barrel, broadly unchanged from July estimates. These projections imply a steady softening trend from the year-to-date average of around $70 for Brent. On Friday, Brent futures closed at $68.12, while WTI settled at $64.01.
Behind the bearish outlook is a combination of oversupply and weakening demand. Opec+, which includes major producers such as Saudi Arabia, the UAE, and Russia, has accelerated output increases in recent months to protect market share. Eight Opec+ producers are currently pursuing raised production targets, a move that has added volumes just as global demand growth shows signs of slowing. “Crude prices remain range-bound, with geopolitical tensions being more than offset by expectations for an oversupplied market into the final quarter and beyond,” analysts at Saxo Bank observed in a note.
Investment banks also share this cautious outlook. Goldman Sachs, Morgan Stanley, and JPMorgan collectively forecast Brent to average $63.57 per barrel in the fourth quarter of 2025, while WTI is projected at just above $60.30, according to a Wall Street Journal survey. Commonwealth Bank of Australia analyst Vivek Dhar also sees Brent sliding to $63 by year-end, citing persistent oversupply and fading seasonal demand.
At the same time, uncertainty about US trade and tariff policies is clouding demand expectations. President Donald Trump’s recent decision to double tariffs on Indian imports to 50 per cent has heightened fears of weaker trade flows and reduced oil demand. India, the world’s third-largest importer, has so far defied Washington’s calls to stop purchasing Russian oil, creating further unpredictability in the global supply chain.
Traders are also keeping an eye on geopolitical flashpoints. Earlier price gains driven by Ukrainian attacks on Russian oil export terminals quickly faded as reports of possible ceasefire talks surfaced, easing concerns about supply disruptions. Phil Flynn, senior analyst at Price Futures Group, suggested the demand pessimism may be overstated. “Supply from Opec is supposed to increase, but we’re not seeing it in the US. I think things are going to stay tight,” he said. Indeed, US crude inventories showed higher-than-expected draws in late August, hinting that demand in industrial and freight sectors remains resilient even as the summer driving season ends with the Labor Day holiday.
However, the broader trend points to a supply-heavy market. Non-Opec producers, including US shale operators, continue to add barrels at a pace that reinforces the glut narrative. Meanwhile, Chinese demand—the key swing factor over the past two years—has been inconsistent as economic recovery slows. With growth concerns persisting in Europe and currency volatility in emerging markets, the demand side appears unlikely to absorb the extra supply meaningfully in the near term.
Ole Hvalbye, analyst at SEB Bank, noted that while US inventories remain supportive in the short term, the balance of risks skews to the downside. “We see late-summer draws, but with Opec+ barrels coming to market and weak macroeconomic indicators, prices are likely to remain capped,” he said.
Market participants are now looking to next week’s Opec+ meeting for signals on whether the group might recalibrate production strategy. While the alliance has shown resolve to regain market share, prolonged price weakness could eventually test the cohesion of its members. For now, the consensus remains that Brent will slide into the low-to-mid $60s by year-end, with WTI hovering just above $60.
