Jadwa: Oil is on a downward trend, and here are our price forecasts for 2025 and 2026

Jadwa Investment revealed that the balance of risks remains tilted to the downside for oil prices, given the uncertain demand outlook and what appears to be a global supply glut this year. At the same time, the risk of geopolitical developments, such as the US-Iran talks, remains double-edged.

Jadwa expects Brent crude to average $67 per barrel this year, with Brent prices fluctuating around $63-$65 per barrel for the rest of 2025, as US tariff policy stabilizes somewhat, US shale oil production stabilizes, and OPEC+ production growth slows later in the year.

It added that for 2026, Brent crude is expected to average $65 per barrel. Global fundamentals may improve if US policymaking stabilizes, the US Federal Reserve finds room for further interest rate cuts, and China continues its stimulus. However, with oil inventories likely to increase during 2025, oil production growth accelerating, and Chinese demand slowing structurally, the oil market may lack an upward catalyst.

According to the report, oil prices averaged $75 per barrel in the first quarter of 2025, down from an average of $80 per barrel in 2024. Prices fell sharply in April, with Brent crude briefly falling below $60 per barrel due to a sharp rise in US tariffs and OPEC+’s decision to increase production more than planned.

Conversely, prices rose slightly in May, with Brent crude reaching around $65 per barrel due to de-escalation in US-China tariff tensions and increased awareness that lower oil prices pose a challenge to US shale oil production.

Jadwa forecasts that Saudi crude oil production will average 9.4 million barrels per day in 2025, up from 9 million barrels per day in 2024, representing a growth of just over 4%. The larger quantities will partially, but not completely, offset the lower prices.