Oil Market Analysis: Overview of Q2 2025 Prices in the Petroleum Sector
Global Oil Market Forecast for 2025-2030: A Period of Adjustment and Growth
The global oil market is set for a dynamic period of adjustment and growth between 2025 and 2030, according to various forecasts. This period will see near-term growth in supply, moderated demand growth, a plateau, and potential slight demand peak around 2029.
U.S. Oil Supply
The United States is projected to produce near record-high crude oil volumes in the mid-2020s. Specifically, U.S. crude oil production is forecasted to reach an all-time high near 13.6 million barrels per day (b/d) in late 2025. After a peak, production is expected to decline to about 13.1 million b/d by late 2026 due to lower oil prices and reduced drilling and completions activity.
Global Oil Prices and Supply
Brent crude oil prices are expected to decline from around $71/b in mid-2025 to about $50-$58/b by early 2026, reflecting growing oil inventories and increased OPEC+ production. Lower prices will likely pressure producers globally to reduce supply in the later 2020s, moderating inventory builds.
Global Oil Demand
The International Energy Agency (IEA) forecasts oil demand to peak around 2029. Near-term demand growth is driven primarily by emerging markets in Asia-Pacific (including India and Southeast Asia) and Africa, while Chinese demand growth moderates due to EV adoption and shifts to gas trucking. Decarbonization efforts and structural changes in large oil-consuming markets like China temper long-term global demand growth.
China's Role
Structural changes, including increasing EV adoption and a shift towards cleaner fuels like natural gas, suggest slower oil demand growth in China, mitigating some global consumption growth. China’s evolving energy mix and industrial policies are pivotal to global demand trends.
Market and Infrastructure Investment
Global oil and gas capital expenditure (CAPEX) is expected to grow at a 4.08% CAGR from $654 billion in 2025 to about $799 billion by 2030, supporting supply infrastructure and maintenance. Increasing investments in LNG infrastructure and digital technologies are significant, especially in North America and Asia-Pacific, reflecting the move to diversified energy sources.
Natural Gas Liquids (NGLs)
Natural gas liquids (NGLs) are forecast to rise by 2 mb/d to 15.5 mb/d by 2030, with much of this increase coming from North America and the Middle East. The IEA expects about 5 million barrels per day of additional production capacity between now and 2030, with a big chunk coming from the American quintet (US, Brazil, Canada, Guyana, and Argentina).
LPG Consumption
LPG consumption is forecast to rise by 1.3 mb/d to 11.8 mb/d by 2030. Asia, led by China and India, will account for more than 65 percent of global LPG demand growth.
Economic Concerns
Economic concerns are expected to impede oil demand, with global GDP growth projected to be uneven, with OECD countries growing at 1.8 percent and non-OECD nations at 3.9 percent. Signs of cooling economic growth in China and renewed trade war anxiety between the US and China further pressured market sentiment.
In summary, the 2025-2030 period will see the U.S. leading supply growth before a slight decline due to market pressures, China's moderated oil demand growth slowing global demand expansion, and emerging markets continuing to drive near-term growth. Oil prices are expected to soften early in this period due to inventory builds and production policies but may stabilize later as supply adjusts. Investments in oil infrastructure and transportation will continue, balanced by the gradual transition towards cleaner energy alternatives influencing long-term demand and supply conditions.
The U.S. oil industry, foreseen to produce near-record high volumes in the mid-2020s, will contribute significantly to the global oil supply during the forecasted period of 2025-2030. Meanwhile, the finance sector might influence global oil prices and supply as prospects suggest lower prices due to increased oil inventories and production, which could prompt global producers to reduce supply in the later 2020s to maintain acceptability in the growing energy market, with cleaner fuels like natural gas gaining popularity, particularly in China.
