Global oil market outlook - statistics & facts
The world is poised for a year of surplus oil production in 2025. One of the most traded commodities in the world, crude oil and its demand are important barometers for the health of the global economy. With the cost of living crisis affecting consumer behavior in major markets such as China and Germany, economic stagnation has already resulted in oil production outperforming demand to a degree that benchmark prices such as WTI and Brent have stayed far below 80 U.S. dollars per barrel since summer 2024. This trend is expected to continue well into 2025 and 2026 as greater upstream activity in non-OPEC countries, such as the United States and Guyana, is set to flood the market with more oil.
In the long-term, industry body OPEC still sees a robust demand for oil products such as diesel and gasoline, although it expects kerosene and jet fuel, aviation fuels that are more difficult to substitute, to see the greatest demand increase until 2045.
Upstream investments remain robust
Despite lower crude prices, 2025 could see nearly three times more upstream investing activity than 2024. A February 2025 forecast sees more than 60 oil and gas extraction projects reaching final investment decision (FID) that year. However, the same forecast also notes that such pursuits will be markedly lessened from 2026 onward. Meanwhile, after two years of significant mergers and acquisitions, particularly in the U.S. shale industry, 2025 is poised for more modest M&A activity. A look at the January 2025 pipeline sees total deal value at around two-thirds the decade high of 2023.Refining margins fall amid lower demand outlooks
Not only producers have been affected by lower oil prices, as declining profits have also been one of the main pain points for refiners. Since the oil price surge of 2022 and 2023, refining margins have notably declined. Outdated infrastructure and uncertainty over long-term oil demand have made continued investment in refineries less attractive, especially in Europe, which has stricter fossil fuel exit strategies. As a result, 2025 is set to see a slew of refinery closures across Europe and the United States. Although these may buoy refining margins in the near term, weak consumption outlooks mean that relief could be short lived, especially as refiners in Asia still plan to add notable capacity.In the long-term, industry body OPEC still sees a robust demand for oil products such as diesel and gasoline, although it expects kerosene and jet fuel, aviation fuels that are more difficult to substitute, to see the greatest demand increase until 2045.
