Oil Oversupply Fears Loom: A Look at 2025 Oil Price Predictions

Commodity Traders Warn of Imminent Oil Oversupply

Several top global commodity traders have stated that long-awaited signs of crude oil oversupply are finally emerging, which could pressure oil prices lower.

Brent crude has already fallen 11% since the end of last month. This decline is largely attributed to OPEC+ nations, as well as countries outside the group, continuing to pump substantial volumes of oil into the market – leading to a general perception of oversupply. Forward curves, used by traders to gauge market strength, also suggest a bearish outlook for the US oil market next year.

“The market seems to be entering a slightly different phase right now,” Torbjorn Tornqvist, CEO of Gunvor Group, said in an interview in London. “We’ve heard this before, and many people have been burned. But this time, at this stage, I think there’s more substance to the ‘oversupply’ claim.”

Earlier in the day, the Paris-based International Energy Agency (IEA) stated that daily oil oversupply would be around 4 million barrels in 2026, 18% higher than forecast just a month ago.

Mixed Predictions for 2025 Oil Prices

During the Energy Intelligence Forum, Tornqvist, along with top executives from Vitol Group and Trafigura Group, expressed expectations for a short-term decline in oil prices, with a rebound anticipated next year. These three oil trading giants handle millions of barrels of crude oil daily.

“Over the past 12 months, we’ve gradually realized that the surplus is imminent,” said Ben Luckock, global head of oil at Trafigura Group, at a forum in London. “The reality might be that oil prices will fall further from here.”

Russell Hardy, CEO of Vitol Group, predicts that crude oil will average around $60 a barrel next year.

Summary of 2025 Oil Price Predictions by Key Traders:

• Vitol: Increased price pressure towards the end of the year; average price of $60 a barrel next year.
• Gunvor: Initially a fall, then back to $62 a barrel.
• Trafigura: Falling to around $50 a barrel before the end of the year, then a rebound; reaching around $60 by this time next year.

While this is far from a “crash,” it would still represent a decline of around 14% from the 2025 average so far – a disappointing outcome for oil majors whose profits heavily rely on crude prices.

“In the second half of this year, more crude oil has entered the market: OPEC production has increased steadily, and non-OPEC countries such as Guyana, Norway (small increases), and Brazil (small increases) have also seen production increases,” Hardy explained.

However, he also pointed to a few reasons not to be overly bearish: the market might be overestimating Venezuela and Iran's (both sanctioned) ability to maintain oil production next year; global refineries are running at full capacity to meet demand; and low oil prices could curb US shale oil output.

In an interview, Tornqvist stated that while crude futures prices should be lower, the market is unlikely to enter a so-called “super contango” state – a condition where substantial profits can be made from storing commodities.

“There’s currently a large amount of oil flowing into the market, but demand for oil hasn’t increased accordingly,” he said. “Besides that, trade tensions are clearly escalating again.”

Analysis: Factors Influencing Oil Prices

The prediction of an oil oversupply is not guaranteed, and several factors could influence oil prices in 2025. These include:

• OPEC+ Policy Decisions: OPEC+'s decisions regarding production levels can significantly impact oil prices.
• Global Economic Growth: Stronger economic growth could lead to increased oil demand, potentially supporting prices.
• Geopolitical Tensions: Geopolitical tensions in oil-producing regions can disrupt supplies and raise prices.
• Technological Advancements: Technological advancements in renewable energy production could reduce oil demand in the long term.