Energy Markets in 2025: Oil, Uncertainty and Global Transformation to Renewable Energy
The energy market in 2025 has not responded to policy, and they have responded to unpredictability. From tariffs to tanker traffic, volatility is the only certainty. This shift means formal forecasts that oil experts around the world have relied on assuming energy prices will remain low this year, which may be inaccurate, especially when ocean conflicts that consume large amounts of fossil fuels suddenly erupt.
Investors still favor alternative energy rather than classic
Energy investment continues to shift towards alternative (renewable) energy sources, as major global economies remain firmly committed to achieving carbon neutrality. Given the increasing oversupply, we expect new oil sector projects to decline gradually. Although the costs associated with geological exploration and exploratory drilling have generally declined, the economic burden of maintaining the competitiveness of the oil industry and stricter environmental regulations are rising. Even the former savior of American energy independence can no longer compete for costs. Capital is no longer a hedging bet – renewable energy is where the gains lie. The cost of sunk in oil and regulatory luggage radiate investors’ patience.
The additional oil risk is a deal that is being negotiated between the United States and Iran. If a temporary “nuclear agreement” is negotiated, the market is expected to receive about 2 million barrels of surplus oil per day. In this case, Brent has the potential to further reduce the $50 level, which is the basis for OPEC+ and the United States to reduce oil production.
Energy security issues and statistics in Europe
European countries continue to work to diversify energy from Russia. In recent years, the energy import structure to the EU has undergone great changes. Despite the sanctions, Russian oil and gas continue to flow to Europe through alternative channels, including through so-called “shadow” fleets, but fundamental changes have been envisioned. In 2024, the United States will become the EU’s largest import partner for liquefied natural gas and distillates. Norway strengthens its actions The largest import partner of the EU For pipeline gas in 2024. Therefore, the EU imports natural gas from Russia (lurried natural gas and pipelines) 2021 150 BCMIt will be nearly reduced (to 80 bcm) in 2022 and the same amount (43 bcm) in 2023.
As for crude oil imports, there are no confirmed statistics due to the lack of a method to identify the origin of the tanker, and even though the amount of oil pumped through the oil pipeline dropped sharply, only southern (Turkey) streams still came from operating branches by the end of 2024. By the end of 2023, Europe will cut imports of Russian fossil fuels by more than 80%. But with this independent inflation, retail consumers will pay month after month. .
It is becoming increasingly obvious that the burden of these changes belongs to European retail energy consumers, who are experiencing rising inflationary pressures. EU energy bills rose by 12% on average after an average increase, and peaked at 16% in January 2023 alone. Inflation has become a hidden cost of energy independence.
OPEC+ Overproduction Challenges and Responses
OPEC+ is currently facing an increasingly complex situation. On the one hand, the oil cartel must assert its advantages in the global oil market and prevent a sharp drop in oil prices. At the same time, it must consolidate its ties with major consumer countries such as the United States, Europe and China, each with its strategic interests.
OPEC+’s decision to increase oil production starting in April 2025 is largely due to its need to maintain market share amid trade tensions. Member states are less worried about falling oil prices, but are more worried about losing their stance to the United States. This is no longer just a temporary problem for the previous administration, but a long-term reality. In addition, OPEC+ expects supply to be reduced only, mainly due to the Trump administration’s sanctions on Iran and Venezuelan oil, and alliance members have pushed their production plans.
The oil cartel promised a 411,000 barrels per day next month, which is equivalent to an early increase in production recovery rate of three per month. As a result, crude oil prices have dropped below $69 for the first time since March 11. The decline coincides with the Trump administration’s sanctions on Venezuela earlier last month, which forced major oil companies like Global Oil to cease operations there earlier last month, possibly undermining the oil supply chain. With global oil withdrawal and early withdrawal of Chevron (CVX), Venezuela has fewer international partners, raising concerns about the future feasibility of the oil industry.
Russia’s role in balancing global oil and gas demand
Russia’s oil revenue has fallen to its lowest point since mid-2023. According to reports, for the four weeks ending April 13, Russia’s offshore oil shipments were reportedly shipped Falling to 3.13 million BPDThis is the lowest since February, below the previous low of about 320,000 bpd. Using monetary measures, the total value of oil transport has decreased by about $80 million, or 6%, to $1.29 billion per week, marking the lowest level since July 16, 2023.
Additionally, OPEC+ requires seven countries that have previously violated their commitments– Iraq, Kuwait, Saudi Arabia, UAE, Oman, Kazakhstan and Russia – By June 2026, under-production of 4.57 million barrels per day.. The compliance schedule is very comfortable, but the Russian oil market and expectations of revenue from oil sales to budget are largely driven by the existence of these resources.
However, Russian gasoline is very different. Russia is expected to increase its gasoline production by 2025 to almost target 695.5 billion cubic meterssignificantly higher than last year. From a perspective, the U.S. Department of Energy estimates that the U.S. will produce about 1.07 trillion cubic meters (or 37.8 trillion cubic feet) of dry natural gas by 2024.
Russia remains an important player in the gas supply market in the eastern hemisphere. But there is a twist: Now, consumers are trapped in the dark because of plans to intermediate the Marines’ LNG delivery volume and how it affects weather conditions. Lack of transparency lays the foundation for increased volatility and increased anxiety, especially since gases are irreplaceable in many industrial areas such as chemical and fertilizer production.
Waiting for the energy market in 2025
Global energy maps are re-drawn in real time. With supply chain re-layout, alliance fractures and climate commitments developing, one truth is that the age of cheap certainty is over. Investors who view volatility as anomalies will be left behind.
- Oil price fluctuations have increased. Geopolitical uncertainty will continue to contribute significantly to price fluctuations in the oil and gas markets.
- Deepen changes in trade flows. Traditional energy trade routes remain disturbed as Russia increases supply through alternative routes, while Europe continues to explore non-Russian sources of imports.
- The continuous transformation of energy theory in some regions. Focuses on energy security and climate change are fueling further investment in renewable energy in Europe and other major economies, although the overall agenda has been lowered with the arrival of a new White House administration.
- Geopolitical competition for energy. Among major consumer countries, competition for stable and reliable energy supply will continue to intensify.
- Unleash the potential of strategic reserves (SPRS). In recurring attacks, governments in major economies in the world strategically release (and may continue to do so) specific amounts of oil or gas reserves to mitigate price spikes caused by geopolitical unrest and trade tariffs.
