What's Affecting Oil Prices This Week? (April 21, 2025)

At the beginning of last week, we expected that oil prices would rebound, and, in fact, oil prices did move up during the week. The price of Brent crude ended the week at $67.96 after closing the previous week at $64.59. The price of WTI ended the week at $64.68 after closing the previous week at $61.48. The price of DME Oman crude ended the week at $69.63.

Prices rebounded, in part, because the Trump Administration announced exemptions to tariffs for some electronic goods from China, including smartphones, computers, semiconductors, flash drives, memory cards, solar cells and flat-panel displays. Additionally, there have been signs that the U.S. is initiating discussions with several major trading partners to arrive at new trade deals that will result in the tariffs being lowered and, possibly, in some cases, being eliminated.

Previously, we have put forward the view that the price of Brent crude is likely to move back toward $70 as we progress through 2Q, and with a favorable resolution of the tariffs, the price of Brent crude could reach $75 while the price of WTI could reach $70.

And we are still holding to that view for several reasons:

• There are concerns about demand as indicated by the International Energy Agency (IEA) and the research arm of OPEC reducing their forecasts for the growth in oil demand – the IEA has reduced its forecast from 1.03 MMbbl/d to 730,000 bbl/d, and the research arm of OPEC has reduced its forecast from 1.45 MMbbl/d to 1.30 MMbbl/d. Despite these downward revisions, it is our view that OECD demand is relatively stable and less affected by economic uncertainty because of structural reasons, while non-OECD demand is supported by the recent downturn in oil prices. Additionally, China is taking numerous steps to stimulate its domestic economy to offset any hits to its exports. 
• While there are concerns about demand, there are also concerns about supply. There is the possibility that OPEC+ could increase supply to regain market share from non-OECD producers. Our view remains, however, that members of OPEC+ will maintain discipline and be proactive in aligning supply with demand so as not to undermine the long-term viability of OPEC+, which is increasingly critical to the stability of the oil market. 
• We also think that the growth in non-OPEC supply will be muted by the uncertainty of low oil prices, including supply associated with U.S. shale producers, which are facing financial and operational pressures because of lower oil prices. These pressures will force the U.S. shale producers to moderate their drilling programs and capital expenditures – and, most likely, revisit payout frameworks, lean into cost optimization, and even pursue further consolidation. 
• The geopolitical landscape remains unsettled and has real potential to result in higher oil prices. The timing of when the conflict between Russia and Ukraine will be resolved is still an open question, with negotiations stalled. Furthermore, the associated risks are skewed to higher oil prices because even with a resolution to the conflict, it is unlikely that more barrels will be brought onto the market. The conflict between Iran and Israel also has the potential to boost oil prices – and to a greater extent than the Russia-Ukraine conflict – because of the threat to Iranian oil exports. While there are reports that the recent talks between the U.S. and Iran have been constructive, there are many issues yet to be resolved before an agreement is reached.

For a complete forecast of crude oil and refined products and other energy-related fundamentals and prices, please refer to our Short-term Outlook.

About the Author: John E. Paisie, president of Stratas Advisors, is responsible for managing the research and consulting business worldwide. Prior to joining Stratas Advisors, Paisie was a partner with PFC Energy, a strategic consultancy based in Washington, D.C., where he led a global practice focused on helping clients (including IOCs, NOC, independent oil companies and governments) to understand the future market environment and competitive landscape, set an appropriate strategic direction and implement strategic initiatives. He worked more than eight years with IBM Consulting (formerly PriceWaterhouseCoopers, PwC Consulting) as an associate partner in the strategic change practice focused on the energy sector while residing in Houston, Singapore, Beijing and London.