What's Affecting Oil Prices This Week? (May 19, 2025)

The price of Brent crude ended the week at $65.33 after closing the previous week at $63.88. The price of WTI ended the week at $62.58 after closing the previous week at $61.09. The price of DME Oman crude ended the week at $64.98. 

Oil prices continued to move upwards with momentum stemming from optimism that the tariff situation is getting closer to being resolved. The outlook for this week, however, is murkier with less likelihood of any new positive news associated with tariffs coming out this week.

Additionally, there remain concerns about the increasing possibility of supply growth substantially outpacing demand growth in light of the recent announcements by members of OPEC+. At the last OPEC+ meeting that took place in early May, members of OPEC+ agreed to increase supply by 411,000 bbl/d in June after increasing supply by a similar amount in May, which was three times the amount previously indicated. OPEC+ is also indicating that a similar level of supply increase will take place in July, and will continue in August, September and October—unless chronic over-producers (including Kazakhstan, Iraq and Russia) not only comply with previously agreed quotas but also reduce supply further to account for early oversupply. If OPEC+ moves forward with an accelerated plan, the unwinding voluntary cuts of 2.2 MMbbl/d will be completed in November of this year, instead of September 2026, which was agreed to last December.

Last week, the International Energy Agency (IEA) increased its forecast for global supply growth for 2025 to 1.60 MMbbl/d (380,000 bbl/d increase from its previous forecast), which would significantly outstrip demand growth, with the IEA forecasting demand growth to be only 740,000 bbl/d. In comparison, Stratas Advisors is forecasting that demand growth for 2025 will be 1 MMbbl/d. Regardless, if OPEC+ moves forward with unwinding previous supply cuts at the accelerated pace now being indicated, there will be significant downward pressure on oil prices—unless there are cuts from other producers, most likely U.S. shale oil producers. It is still possible, however, that Saudi Arabia and OPEC+ moderate their supply increases because of weakness in oil demand or because the overproducers within OPEC+ fulfill their pledge to reduce production.

There are also uncertainties about the extent of sanctions on oil-exporting countries—namely, Russia, Iran and Venezuela...

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. Paise, 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.