Oil Market Report: Q4 2025

The global oil market in 4Q 2025 was characterised by having a deepening supply surplus, which led to a significant decline in international benchmark prices. By December 2025, the average monthly price of Brent fell to approximately US$63 per barrel, its lowest level since early 2021. This downward trend was driven by a record average market surplus of 2.6 million barrels per day (mb/d) at year end, as global supply growth, mostly from non-OPEC+ nations, outpaced sluggish global oil demand. Nevertheless, a number of geopolitical events impacted global oil prices in Q4 2025, amid the significant supply surplus:

• A Gaza ceasefire signed at the start of the quarter initially eased the Middle East risk premium.
• US sanctions on Russian oil caused a brief 5% price surge.
• Continuing Red Sea shipping disruptions triggered short-term price jumps of approximately 2% with each incident.
• Escalating US enforcement against Venezuela shipping activities tightened the heavy crude supply, providing some upward price pressure.
• Ukrainian drone attacks on Russian refineries caused supply threats, but with only a minor price impact.

However, all events that could trigger price rises were overshadowed by the global supply glut. The end result was that the Brent oil price didn’t exceed US$66.25 for Q4 and the downward trend in the oil price continued. In our analysis of global oil markets in Q4 we see the following as being critical market drivers:

• Sanctions and trade shifts
• Tariff turmoil
• US – Iran tensions
• US oil price policy