Geopolitical Tensions Could Impact Oil Prices in 2025, Says Vitol CEO

Image Credit: Reuters

 

Global oil prices are expected to remain in the $70 to $80 per barrel range in 2025, maintaining levels similar to those of 2024. This projection is influenced by ongoing geopolitical uncertainties that may affect supply, according to Russell Hardy, CEO of Vitol, the world’s largest independent oil trader.

Despite concerns about potential supply disruptions in the Middle East, including issues related to Iranian and Venezuelan oil exports under a possible second term for Donald Trump, oil prices are being capped by fears of an unwinding of OPEC+ supply cuts and weak demand growth from China.

Hardy emphasized that there are still many geopolitical risks and unknown factors surrounding the Middle East, which makes it premature to conclude that the market will be oversupplied in 2025.

On the other hand, Janet Kong, CEO of Hengli Petrochemical International, pointed to the current 4 million barrels per day of spare oil capacity globally, which alleviates immediate concerns about supply. She believes that oil demand growth in China and India—two of the largest consumers—will be the main drivers of oil prices in 2025.

However, she noted that weak fuel demand and export constraints have led to a decrease in Chinese refining utilization rates, dropping below 80%, a level considered very low by industry standards.

This suggests that Chinese refining margins are unlikely to recover in the short term. As for China's oil demand, Hardy expects growth of 700,000 barrels per day in 2025, which, although slower than in recent years, is seen as more typical as the country moves past pandemic recovery.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paraphrasing text from "Reuters all rights reserved by the original author.