Global oil prices are expected to remain between $70 and $80 a barrel in 2025, as in 2024, as geopolitical risks create supply uncertainty, Russell Hardy, CEO of Vitol, the largest trader, said on Thursday independent oil producer in the world.
Global oil prices have been capped by fears of a reversal of OPEC+ supply cuts in 2025 and weak growth in China's oil demand, despite risks of supply disruption in the Middle East.
“It is clear that there is a bit of concern about the balances for 2025 and that is what is driving the market today,” he said at the FT Commodities Asia Summit.
However, there are still a lot of geopolitical tensions, unknowns around the Middle East, around Iranian and Venezuelan exports under the new US presidency of Trump, he added.
“So I think it's a little premature to conclude that the market will be in glut in 2025,” he said.
China faces a squeeze in supplies of cheap Iranian crude, which accounts for about 13% of imports to the world's largest oil importer, if Donald Trump increases sanctions enforcement against Tehran after returning to the presidency United States in January.
Janet Kong, CEO of Singapore-based Hengli Petrochemical International, said there were currently 4 million barrels per day (bpd) of spare oil capacity globally, reducing supply concerns.
Instead, it expects growth in fuel demand in China and India, which are the world's second and third largest oil consumers, to drive up global oil prices in 2025.
Weak fuel demand and export constraints have caused Chinese refinery utilization rates to drop to less than 80%, which is “very low” by industry standards, Mr. . Kong, who heads the commercial arm of Chinese producer Hengli Petrochemical.
Chinese refining margins are unlikely to recover in the short term, she added.
Vitol's Mr. Hardy said China's oil demand was expected to increase by 700,000 bpd in 2025.
“It is not as strong as that of the last two or three years, but it will never be as strong as that which recovers from the pandemic,” he said, adding that China's growth in 2025 would be more normal than that of the last two years.
