Oil Market Update – June 2025

The global oil market in June 2025 was marked by significant geopolitical tension, fluctuating supply-demand dynamics, and mixed sentiment across traders and analysts.

Price Movements:In mid-June, oil prices spiked after Israel launched airstrikes on Iranian facilities on June 13. This raised fears of disruption in the Strait of Hormuz, a critical oil shipping route. Brent crude jumped to around $74–78 per barrel, and WTI rose to $77.60, reflecting an 11% surge. However, by the end of June, easing tensions and U.S. diplomatic responses led to a decline, with prices retreating to below $70 per barrel.

Supply & Demand:

·      Global oil supply increased by 330,000 barrels per day (b/d) in May to reach 105 million b/d, with production growth seen across both OPEC+ and non-OPEC countries.

·      The IEA expects global oil supply to grow by 1.8 million b/d in 2025 and 1.1 million b/d in 2026.

·      Demand growth for 2025 is projected at 720,000 b/d, slightly reduced from earlier estimates, with a further 740,000 b/d increase anticipated in 2026.

·      Oil inventories rose for the third consecutive month, though OECD stocks remained 97 million barrels below the year-ago level.

Geopolitical Risks:Tensions between Israel and Iran escalated briefly, with Iran’s parliament voting symbolically to consider closing the Strait of Hormuz. Although the strait remained open, the episode added a significant geopolitical premium to oil prices during the month.

Market Outlook:Oil prices are likely to stay within a range in the coming months—Brent between $65 and $80, WTI between $64 and $78—depending on further geopolitical developments. The EIA projects an average Brent price of $69 per barrel for 2025, though oversupply concerns and inventory levels may push prices lower into 2026.