Oil markets experienced a significant downturn in 2025, with prices falling by more than 10%. Brent crude is on track to record its longest annual losing streak in history. This decline is attributed to a global supply glut exacerbated by geopolitical tensions, increased tariffs, and rising production from OPEC+ nations.
The situation is further complicated by ongoing sanctions against Russia, Iran, and Venezuela, which have disrupted traditional supply chains. Brent crude futures have fallen by approximately 18%, marking the largest decline since 2020. West Texas Intermediate (WTI) crude has also seen a substantial annual decrease of around 15%.
This reversal follows a strong start to the year, initially fueled by US sanctions against Russia and the impact of conflicts in Ukraine and Iran on global supplies. However, increased production from OPEC+ has ultimately outweighed these factors.
Despite OPEC+’s decision to increase production by approximately 2.9 million barrels per day since April, the alliance has opted to suspend further production increases in the first quarter of 2026. This decision comes amid forecasts that global supply will exceed demand by millions of barrels per day. This excess supply is the primary driver behind the current price slump.
Analysts suggest that oil prices could fall even further before OPEC+ intervenes again to adjust production levels. Some predict that prices could potentially reach as low as $50 per barrel if the current oversupply persists. The coming months will be critical in determining the long-term trajectory of oil prices. The market remains highly sensitive to geopolitical developments and any potential shifts in OPEC+ policy.
DZWatch will continue to monitor these developments closely and provide updates as they unfold.
