Global Oil Market Report — September 2025

The global oil market has entered a phase of relative stability in September 2025 following periods of price volatility earlier in the year. Brent crude is currently trading within the range of USD 81 to 84 per barrel, while WTI remains between USD 77 and 80. This moderation in price movement is primarily the result of sustained production discipline from OPEC+, robust summer transport fuel demand and persistent geopolitical risk premiums embedded in physical supply routes. However, while supply restraint has been effective in supporting prices, weaker industrial activity in China and the United States, coupled with expanding inventory levels, has prevented any significant upward breakout in pricing.

Supply conditions remain tightly managed, with OPEC+ extending voluntary production cuts through the third quarter of 2025 in an effort to maintain balance. Saudi Arabia and Russia continue to anchor this strategy, showing little indication of shifting policy despite growing pressure from member states seeking to increase exports in order to meet fiscal requirements. Compliance levels across the alliance remain high and no major relaxation of output quotas is expected in the near term. Outside of OPEC+, the United States has maintained a conservative supply posture. Despite oil prices that could normally justify production expansion, U.S. shale operators are prioritising capital discipline over volume growth due to elevated drilling costs, labour constraints and sustained investor pressure for financial returns rather than output gains. As a result, the EIA expects U.S. crude production to remain largely flat for the remainder of the year, limiting non-OPEC supply growth.

Geopolitical risks continue to exert influence over market sentiment. Ongoing instability across the Middle East, particularly involving Iranian-backed disruptions to maritime traffic in the Red Sea and Strait of Hormuz, has raised freight and insurance costs for crude and refined product cargoes, embedding a visible risk premium into supply contracts. At the same time, continued conflict across parts of Eastern Europe has disrupted refined fuel logistics, particularly for diesel and gasoline movements into European markets. Although no single event has yet resulted in a severe supply outage, traders remain highly sensitive to any escalation that could impede major transit corridors.

On the demand side, consumption trends remain uneven. China continues to record strong transport fuel usage, particularly in road and aviation sectors, but its broader industrial recovery has yet to stabilise, with manufacturing and export performance showing intermittent weakness. In the United States and Europe, elevated levels of summer travel have extended seasonal demand strength for gasoline and jet fuel; however, broader consumption growth is being constrained by persistent inflation and higher interest rates. Reflecting these mixed indicators, the International Energy Agency has revised its global oil demand growth projection to between 1.0 and 1.2 million barrels per day for 2025, signalling moderated expansion compared to previous expectations.

Despite continued investment in renewable energy, oil remains fundamental to medium-term energy security, and major producers are not yet shifting away from hydrocarbons in absolute terms. Instead, most large international oil companies are pursuing dual strategies, maintaining core upstream portfolios while gradually increasing allocations toward carbon capture initiatives, biofuel development and early-stage hydrogen infrastructure. ESG considerations, particularly within Europe and North America, are increasingly influencing capital allocation frameworks, but they have not materially reduced near-term oil supply capacity.

Looking ahead, the oil market is expected to remain range-bound, with Brent crude likely to trade between USD 75 and 85 per barrel through the remainder of the year. Price direction will be heavily influenced by the continued cohesion of OPEC+ policy, the trajectory of global monetary conditions, China’s economic performance and the behaviour of global refinery utilisation and stockpile levels. In the absence of a major geopolitical escalation or sudden demand deterioration, the market appears to be entering a period of temporary equilibrium, characterised by carefully managed supply and cautious consumption growth. Strategic positioning in this environment should focus on managing risk exposure while remaining alert to sudden shocks that could rapidly shift pricing dynamics.