In its February short term energy outlook (STEO), which was released on Tuesday, the U.S. Energy Information Administration (EIA) revealed its latest Brent spot price forecasts for 2025 and 2026.
According to the STEO, the EIA sees the Brent spot price averaging $74.50 per barrel this year and $66.46 per barrel next year. In its previous STEO, which was released in January, the EIA projected that the Brent spot price would average $74.31 per barrel in 2025 and $66.46 per barrel in 2026.
The EIA’s latest STEO sees the commodity coming in at $77.13 per barrel in the first quarter of this year, $75 per barrel in the second quarter, $74 per barrel in the third quarter, and $72 per barrel in the fourth quarter. The organization’s January STEO saw the Brent spot price averaging $76.34 per barrel in the first quarter of 2025, $75 per barrel in the second quarter, $74 per barrel in the third quarter, and $72 per barrel in the fourth quarter.
The EIA noted in its February STEO that the spot price of Brent crude oil averaged $79 per barrel in January. It highlighted that this was $5 per barrel higher than in December.
“Crude oil prices increased immediately following the January 10 announcement of a new round of sanctions on Russia’s oil shipments,” the EIA said in its latest STEO.
“Prices gradually fell over the course of the month as concerns around weak global oil demand growth and oversupply regained focus from market participants. The Brent spot price began February around $76 per barrel, about the same as at the start of January,” it added.
“On February 1, President Donald J. Trump signed an Executive Order announcing the imposition of tariffs on imports from Canada, Mexico, and China. Subsequently, the implementation of tariffs for imports from Mexico and Canada were delayed by 30 days, so the effects of those two policies are not reflected in this outlook,” the EIA went on to state.
The organization said in its STEO that “U.S. tariffs placed on imports from China through that Executive Order, as well as China’s retaliatory tariffs placed on select imports from the United States”, are incorporated in its outlook “and remain through the entire forecast period”.
“Although the future imposition of tariffs could affect oil trade routes, we do not presently anticipate the tariffs put forward in the February 1 executive order would significantly affect global oil supply,” the EIA noted in the February STEO.
“Still, the possibility of future tariffs and the new sanctions on Russia are sources of uncertainty for oil prices going forward,” it added.
“Our assessment is that although the latest sanctions on Russia will slightly reduce Russia’s oil production compared with what we forecast last month, they will mostly result in shifts in global oil trade flows, which we do not forecast in our outlook,” it continued.
“The sanctions do not markedly impact global oil balances, or our forecast of Brent crude oil prices compared with last month’s STEO. We still anticipate that global oil inventories will fall by 0.5 million barrels per day in the first quarter of 2025 because of OPEC+ production cuts, which the organization recently reaffirmed,” it went on to state.
The EIA noted in its latest STEO, however, that it expects global oil inventories “will begin increasing once OPEC+ begins raising production, starting in April 2025”.
“These production increases combined with expectations of relatively weak global oil demand growth will lead to a 0.9 million barrel per day increase in global oil inventories in the second half of 2025 and a 1.0 million barrel per day increase in 2026,” it said.
“We expect that currently falling global oil inventories and increased uncertainty will keep crude oil prices at an average of $77 per barrel through 1Q25, before increasing inventories again begin putting downward pressure on prices through the remainder of our forecast,” it added.
“As a result, we forecast the Brent crude oil price will fall to $72 per barrel in December 2025, averaging $74 per barrel in 2025 before falling to an average of $66 per barrel in 2026,” it continued.
The EIA warned in its February STEO that “significant uncertainty remains” in its oil price forecast.
“The impact of recently announced sanctions and tariffs on Russia and China have heightened oil price volatility in the short term while markets and trade patterns adjust,” it pointed out.
“In addition, the eventual resolution of the delayed tariffs on oil volumes from Canada and Mexico as well as the potential for sanctions on oil volumes from Iran remains, which have the potential to influence oil prices,” it added.
“Lastly, our previously noted sources of uncertainty all remain and are likely to have lasting impacts on oil prices throughout the STEO forecast period ending next year,” it went on to state.
A research note sent to Rigzone by the JPM Commodities Research team on Friday showed that J.P. Morgan expects the Brent crude price to average $73 per barrel in 2025 and $61 per barrel in 2026.
The company sees the commodity averaging $74 per barrel in the first quarter of this year, $77 per barrel in the second quarter, $73 per barrel in the third quarter, and $69 per barrel in the fourth quarter, the note showed.
In a BMI report sent to Rigzone by the Fitch Group on February 5, BMI projected that the Brent price will average $76 per barrel in 2025 and $75 per barrel across 2026, 2027, 2028, and 2029.
A Bloomberg consensus included in that report forecast that the Brent price will come in at $73 per barrel this year, $71 per barrel next year, $72 per barrel across 2027 and 2028, and $67 per barrel in 2029. BMI is a contributor to the Bloomberg consensus, BMI highlighted in that report.