Published by Global Banking and Finance Review
Posted on June 30, 2025
3 min readLast updated: January 23, 2026
Oil price forecasts rise due to Middle East tensions, but OPEC+ supply and demand concerns limit potential gains.
By Anmol Choubey and Kavya Balaraman
(Reuters) -Analysts have marginally lifted their oil price forecasts after the flare-up of tensions in the Middle East, but rising OPEC+ supply and a tempered demand outlook continue to weigh on crude, a Reuters poll showed on Monday.
A survey of 40 economists and analysts in June forecast Brent crude will average $67.86 per barrel in 2025, up from May's $66.98 forecast, while U.S. crude is seen at $64.51, above last month's $63.35 estimate. Prices have averaged roughly $70.80 and $67.50 so far this year respectively, as per LSEG data.
The Iran-Israel conflict and the U.S. decision to intervene have led to sharp swings in oil prices this month, with Brent prices touching $81.40 before falling to settle at $67.14 after the ceasefire.
"We envisage the region will remain on edge for the time being... leading to some lingering volatility in oil prices in coming days and weeks," said Suvro Sarkar, lead energy analyst at DBS Bank.
However, many analysts saw price spikes from the conflict as temporary, barring any serious escalation in the region. As long as Gulf production stays online, rising OPEC+ output and comfortable inventories should limit crude's rally, said Cyrus De La Rubia, chief economist at Hamburg Commercial Bank.
"We expect prices to settle back toward fundamentals if the Iran-Israel conflict does not broaden further," he added.
OPEC+ in May agreed to another increase of 411,000 barrels per day of oil for July, bringing the total increases made or announced since April to 1.37 million bpd. These increases are having a significant impact on sentiment in a market already spooked by the impact of U.S. trade policy on global demand, said Matthew Sherwood, lead commodities analyst at EIU.
"We expect OPEC+ to exert caution in raising production, even putting plans on hold indefinitely at the first signs that prices may fall significantly," Sherwood added.
Meanwhile, analysts expect global oil demand to grow by an average of over 730,000 bpd in 2025, compared to 775,000 bpd in last month's poll. While the trade deal between the U.S. and China has somewhat alleviated demand concerns, markets are taking a cautious view of its impact.
"The US-China trade deal may modestly support oil demand by improving market sentiment and trade flows, though its impact is likely to be limited and shaped by broader economic and supply dynamics," said Tobias Keller, analyst at UniCredit.
(Reporting by Anmol Choubey and Kavya Balaraman in Bengaluru; Editing by Sharon Singleton)
Analysts have raised their oil price forecasts due to the flare-up of tensions in the Middle East, particularly the Iran-Israel conflict.
The survey of economists forecasts Brent crude will average $67.86 per barrel in 2025, an increase from May's forecast of $66.98.
OPEC+ has agreed to increase oil production by 411,000 barrels per day for July, but they are expected to exercise caution in raising production further if prices fall significantly.
Analysts expect global oil demand to grow by an average of over 730,000 barrels per day in 2025, a decrease from the previous month's projection of 775,000 barrels per day.
The US-China trade deal may modestly support oil demand by improving market sentiment and trade flows, although its impact is likely to be limited by broader economic and supply dynamics.
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