Brent crude oil price forecast increased

The US Energy Information Administration (EIA) has revised upward its Brent crude oil price per barrel forecast for this year.

Thus, the price forecast for this year has been updated to $68.89, an increase of approximately $2.9 compared to the previous report.

GEOPOLITICAL RISKS ARE THE MAIN REASON FOR THE REVISION

According to EIA's "July 2025 Short-Term Energy Outlook Report," the upward revision in oil prices was driven by the increase in geopolitical risks.

The report cited the main justification for the revision as the significant increase in the risk premium following Israel’s launch of attacks targeting nuclear and military facilities and civilian settlements in various cities of Tehran on June 13, while the nuclear negotiation process between Iran and the US was ongoing.

Global stocks are increasing, prices are rising slightly

Despite this risk premium, however, the significant increase in global oil inventories is expected to limit upward price movements. The price of a barrel of Brent crude, which stood at $75.83 in the first quarter of 2025, is expected to fall to $64.02 in the final quarter of the year and reach $58.48 for the entirety of 2026.

OPEC+ DECISIONS ANNOUNCED BEFORE FORECAST

In addition, the report stated that the forecast was completed before the OPEC+ group's August production increase decision announced on July 5, and that the announced production targets remained above the levels assumed when preparing the outlook.

Drilling activities have slowed down

In addition, falling oil prices have caused producers to slow down their drilling and well completion activities throughout this year, according to the report, which states that US crude oil production is expected to decline from 13.28 million barrels per day recorded in the second quarter of 2025 to 13.26 million barrels per day in the last quarter of 2026.

On an annual basis, production is estimated to remain constant at an average of 13.4 million barrels per day in 2025 and 2026.

PRICE EXPECTATIONS UPDATED

This means the average price of a barrel of Brent crude this year is expected to be $68.89, up from the previous estimate of $65.97.

The average price of a barrel of West Texas Intermediate (WTI) crude oil is expected to be $65.22, compared to $62.33 last month.

The EIA announced the average price of a barrel of Brent crude oil as $80.56 and the price of a barrel of WTI crude oil as $76.60 last year.

US AND GLOBAL SUPPLY-DEMAND OUTLOOK

Average daily crude oil production in the United States is expected to be approximately 13.37 million barrels this year.

This figure was recorded as approximately 13 million 210 thousand barrels last year.

On the other hand, this year, global oil supply is expected to be 104 million 610 thousand barrels per day, while global oil consumption is expected to be 103 million 540 thousand barrels per day.