Oil in 2025: Prices, Reserves, and Economic & Geopolitical Factors

Introduction

Oil remains a cornerstone of the global economy and continues to be subject to significant volatility due to economic and geopolitical factors. This report aims to review the current oil price, reserves of producing countries, production and trade activity, and oil price forecasts for 2025.

Current Price

As of June 2025, Brent crude is priced at approximately $70 per barrel, experiencing slight fluctuations due to geopolitical tensions in the Middle East. Prices have recently surged on fears of escalation between Iran and Israel but remain within the $65–75 range, influenced by global oversupply and increased production from countries like Saudi Arabia.

Reserves of Producing Countries

Owning massive oil reserves strengthens the global market influence of producing countries. According to OPEC, Venezuela holds the largest reserves at 303.8 billion barrels, followed by Saudi Arabia with 258.6 billion barrels, Iran with 208.6 billion barrels, Iraq with 145.0 billion barrels, and the UAE with 113.0 billion barrels. In Q1 2025, global oil production rose to 104.9 million barrels per day, up by 1.8 million barrels per day, driven by increased output from OPEC+ nations, especially Saudi Arabia.

Production and Trade Activity

OPEC+, led by Saudi Arabia and Russia, agreed to cut production by 1.66 million barrels per day until the end of 2025 to support price stability. However, Saudi Arabia has announced plans to raise output, potentially exerting downward pressure on prices due to surplus. Russian exports have been affected by Western sanctions, reducing its market share, while countries like the UAE and Qatar have boosted foreign investments supported by financial surpluses. Non-compliance with output quotas by some OPEC+ members adds to market volatility.

Oil Movement Amid Wars

Geopolitical conflicts, including the Russia-Ukraine war and unrest in the Middle East, significantly affect oil prices. The Russia-Ukraine conflict, ongoing since 2022, triggered sanctions that limited Russian oil exports and pressured global supply. In the Middle East, current tensions like the Gaza conflict and escalating friction between Iran and Israel have caused temporary price spikes due to supply disruption fears. These conflicts heighten uncertainty, prompting markets to monitor geopolitical developments closely.

Oil Price Forecast 2025

• U.S. Energy Information Administration (EIA): Forecasts Brent crude will average $75 per barrel in Q3 2025, potentially declining to $68 in 2026 due to rising global supply.
• National Bank of Kuwait: Projects an average of $70 per barrel in 2025, noting that prices will remain relatively low due to supply surplus.
• Citi Bank: Raised its oil forecast for 2025 due to geopolitical risks, particularly involving Russia and Iran. However, it warns of possible price drops if tensions ease.
• Global Economics Unit: Expects Brent to average $80.8 per barrel in 2025, supported by a stronger dollar and increased emerging market demand, while warning that supply surplus may cap price gains.

Economic and Geopolitical Factors

1. Inflation and U.S. Dollar Strength: A stronger dollar pressures oil prices, while rising demand in emerging markets offsets it.
2. Geopolitical tensions: Supply disruption fears drive price spikes.
3. OPEC+ policies: Decisions to increase or cut production directly impact price stability.

Conclusion

In 2025, oil remains a strategic commodity influenced by supply-demand dynamics and geopolitical developments. With a current price around $70 per barrel and forecasts ranging from $60 to $80.8, oil is highly sensitive to global events. Geopolitical conflicts such as the Russia-Ukraine war and Middle East tensions offer temporary price support, but increasing output from OPEC+ may limit gains. It is recommended to follow geopolitical updates and OPEC+ strategies to better understand market direction.