Sluggish demand from China and concerns about oversupply are likely to keep oil prices below $80 a barrel this year. But tougher U.S. sanctions on Russian crude and geopolitical tensions could provide price support.

Brent crude is forecast to average $74.57 a barrel in 2025, up from December’s forecast of $74.33 and the first upward revision to the outlook since April.

Brent fell more than 3% in 2024 due to economic difficulties in China and rising U.S. and non-OPEC oil production.

WTI is projected to average $70.40 per barrel in 2025 versus $70.86 seen in last month’s poll.

The two main drivers of oil prices this year will be ongoing geopolitical risks, which are expected to keep prices below about $70, and weak demand growth in China.

Recent U.S. sanctions on Russian oil could disrupt exports and cause short-term market balance changes as well as temporary price increases.

However, the market is likely to remain in surplus this year due to factors such as OPEC+ production increases and U.S. oil field growth that will affect prices.

The impact of U.S. sanctions on Russian oil will be significant. The sanctions are likely to affect Russia more significantly than global oil prices.

Trump last week reiterated his call for OPEC to lower oil prices in order to hurt oil-rich Russia’s finances and help end the war in Ukraine.

Markets are now eagerly awaiting a ministerial meeting of the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, scheduled for February 3.

Analysts predict that global oil demand will increase by between 700,000 and 1.3 million barrels per day (bpd) in 2025.

However, analysts say Trump’s return to office could lead to tighter sanctions on Iranian and Venezuelan oil, which would allow OPEC+ to increase production and potentially increase overall oil supply.

Meanwhile, a three-way deal between the US, China, and OPEC+ could also be a scenario given that the Trump campaign focused on lowering energy prices.