Crude Oil Prices Down In 2025 Due To Oversupply
Support CleanTechnica's work through a Substack subscription or on Stripe.
Or support our Kickstarter campaign!
I don’t know if this was coordinated in any way with the Venezuela drama, but it’s an interesting piece to come out from the US Energy Information Administration (EIA) at this time. The agency just published the following report: “Crude oil prices fell in 2025 amid oversupply.”
The most popular assumption regarding Donald Trump having the USA take over Venezuela is that it’s about oil. Venezuela has approximately 17% or 18% of the world’s crude oil reserves, more than Saudi Arabia, and Donald Trump wants that oil.
One of the confusing things about this, though, is what’s in the headline — the world is in a period of oil oversupply. More pointedly, with China’s auto market rapidly electrifying, Europe’s auto market electrifying, and now even many other auto markets around the world electrifying, oversupply may be the name of the game for a long time. However, thinking about it more, Donald Trump probably doesn’t know any of this. Even if he has been told some of these things (but I don’t know who in his orbit actually would), he most likely wouldn’t believe them.
But let’s get back to the new EIA report.
“Crude oil prices generally declined in 2025 with supplies in the global crude oil market exceeding demand. Crude oil inventory builds in China muted some of the price decline. Events such as Israel’s June 13 strikes on Iran and attacks between Russia and Ukraine targeting oil infrastructure periodically supported prices.” Funny how that works….
“On a monthly average basis, the price of Brent crude oil declined from a high of $79 per barrel (b) in January to a low of $63/b in December, which was the lowest monthly average price since early 2021. The annual average price was $69/b, the lowest since 2020, even when adjusting for inflation.” Wow. We’re getting back to COVID-19 lockdown numbers!
We just don’t need as much oil as many expected, even with China filling up its reserves.
“In the first half of the year, crude oil prices declined in response to slowing economic activity, which can affect global oil demand. Prices decreased in the first quarter (1Q25) with a contraction in U.S. GDP, and prices fell nearly $15/b further in April amid expectations that escalating tariffs among large economies could continue to slow economic growth.” If we think about it, we are not even in an economic recession or depression (yet). What if that does hit? Of course, the economy is not great, and perhaps worse than many are admitting. The tariffs are making the cost of living higher. And what is actually going to turn that around?
“In the second half of the year, OPEC+ announcements that increased crude oil production targets for the group increased the prospect of an oversupplied market. In our most recent Short-Term Energy Outlook, we estimate that global production of crude oil and liquid fuels outpaced consumption throughout 2025, with implied stock builds of more than 2.5 million barrels per day in the final two quarters of the year. These stock builds were the largest recorded since 2000, aside from in 2020.” Wow — the largest stock builds since 2000!?
The oil market is looking dark. So, really, why go take over another country for more oil? What sense does that make?
2026 could be an interesting year for the oil industry.
Support CleanTechnica via Kickstarter
Sign up for CleanTechnica's Weekly Substack for Zach and Scott's in-depth analyses and high level summaries, sign up for our daily newsletter, and follow us on Google News!
Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.
Sign up for our daily newsletter for 15 new cleantech stories a day. Or sign up for our weekly one on top stories of the week if daily is too frequent.
CleanTechnica uses affiliate links. See our policy here.
CleanTechnica's Comment Policy
