What's Affecting Oil Prices This Week? (April 28, 2025)

The price of Brent crude ended the week at $65.83 after closing the previous week at $67.96. The price of WTI ended the week at $63.18 after closing the previous week at $64.68. The price of DME Oman crude ended the week at $68.21.  

There are still concerns about the potential for supply to outstrip demand. We have long held the view that OPEC+ will continue to align supply with demand in a proactive manner. Recent news, however, is increasing the uncertainty associated with the ability of members of OPEC+ to maintain cooperation and agreement on future production quotas. Last week, Reuters reported that some members are pushing for a supply increase in June similar in scale to the agreed increase of 411,000 bbl/d scheduled for May.

 Additionally, Kazakhstan, which has been supplying in excess of its agreed quota, will be prioritizing national interests over those of OPEC+, as voiced by the energy minister of Kazakhstan. The energy minister further stated that the government had no ability to reduce the production of independent oil companies operating in Kazakhstan, and that the government is not willing to shut in production at its own fields and risk damaging further production. The other major overproducers, namely Russia and Iraq, have stated that they will reduce production to account for the earlier overproduction. The next OPEC meeting is scheduled for May 5, and we think it will be essential for OPEC+ to communicate that its members 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.

While there are concerns about OPEC+ overproducing, the threat of low prices is putting pressure on US shale producers. Our upstream team has recently completed a breakeven analysis of U.S. shale oil producers operating in the major oil plays – Permian, Eagle Ford, Bakken and Denver-Julesburg (D-J) Basin. The breakeven analysis was done for the following tiers: operating breakeven, debt service breakeven, sustaining capex breakeven, and dividend sustaining breakeven.

The analysis highlights the Permian Basin's sustained competitive advantage. With the next-to-lowest operating breakeven of $42.90/bbl. and the lowest capex breakeven of $68.17/bbl. In contrast, higher-cost basins such as the Bakken and D-J present more fragile financial structures. The Bakken’s capex breakeven of $83.88/bbl. and dividend breakeven of $92.74/bbl. indicate that most operators are currently unable to sustain drilling and distributions without relying on debt or cash from higher-margin assets. Similarly, the D-J Basin—while lower cost than the Bakken—still struggles with a dividend-sustaining breakeven of $80.58/bbl. These dynamics limit both growth and shareholder return and may lead to reduced rig activity, delayed completions, or a shift toward only high-return zones in 2025.

While the supply side represents, for the most part, downside risk, support for oil prices remains heavily dependent on positive news pertaining to tariffs. The recent stability in the financial markets and the oil markets stems mainly from the Trump Administration indicating some flexibility around its tariff policies.

 For the upcoming week, this is still the case. If there is no negative news this week about tariffs, we expect that the price of Brent crude could approach $67, and with positive news on the tariff front, the price of Brent crude could break through $68. During this week, there will be plenty of data released for the US economy, including consumer confidence from the Conference Board, the initial estimate for 1Q GDP growth, core PCE inflation and nonfarm payrolls. Positive results will provide a boost to oil prices, but the boost will be mitigated because the data do not fully reflect the impact of heightened tariffs.

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.