A $60 barrel? Oil prices to fall in 2025 due to market surplus, says Citi

Oil prices could fall significantly in 2025 as the market enters a significant surplus, Citi has warned. The main reasons are a drop in demand caused by the increasing adoption of electric vehicles and greater energy efficiency, while non-OPEC production will grow.

Citi forecasts

Under Citi's base case scenario, the price of global benchmark Brent starts to decline in the fourth quarter of 2024 and settles at $60 per barrel in 2025. World oil inventories are projected to grow by 1.4 million barrels per day (bpd) next year.

OPEC+ members recently announced plans to increase production by 2.5 million barrels per day from October to September 2025. Even if OPEC+ called off its plan entirely, there would still be a surplus of 900,000 bpd on the market, Citi analysts said.

Non-OPEC production

Non-OPEC oil production is expected to increase by 1.8 million barrels per day in 2025, mainly due to increased production in North America, Brazil and Guyana. This production growth will exceed expected…