Fitch Revises 2025 Oil Price Outlook

In a significant update, Fitch Ratings has adjusted its 2025 oil price forecasts downward, pointing to weaker global growth influenced by ongoing trade tensions and an anticipated increase in OPEC+ production. The revised projections now set Brent crude at an average of $65 per barrel, a decrease from the previous $70, with WTI expected to average $60, down from $65.

Understanding the Oversupply Concern

The adjustment reflects growing concerns over a potential oversupply in 2025, as global output could surge by more than 1.6 million barrels per day should OPEC+ move forward with its May schedule to phase out voluntary cuts. Further complicating the outlook are instances of producers exceeding their production quotas and the potential ripple effects of new US sanctions targeting Iran and Venezuela.

Stability in Medium-Term Forecasts

Despite these short-term adjustments, Fitch has maintained its medium-term and mid-cycle oil and gas price assumptions unchanged. In the United States, the lower price environment may deter new drilling activities, with industry surveys indicating that many producers require at least $65 per barrel to break even.