GLOBAL OIL
Outlook for oil: The search for market balance
Abhi Rajendran Nonresident Fellow
Skip York Nonresident Fellow
Introduction The global oil market in 2025 has been being shaped by a combination of demand uncertainties, increasing OPEC+ supplies, and geopolitical flare-ups. Despite the earlysummer Middle East tensions, which triggered price volatility and supply concerns, we think prices are likely to stay in the $60s for most of this year. That price range will keep U.S. production rather flat to slightly down, so moderate-to-normalized global demand growth in 2026 should see the market rebalance in the $70s. The price path depends on OPEC+ production strategy, U.S. shale response to prices, global demand, and broader economic and political factors.
What to Watch The oil market has its head on a swivel, watching a multitude of variables that are pulling it in different and, in some cases, opposite directions. Below are the key themes and trends that we are watching which will be topics of our ongoing research over the coming year.
Energy Insights 2025
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