What's Affecting Oil Prices This Week? (March 24, 2025)

The price of Brent crude ended the week at $72.11 after closing the previous week at $70.62. The price of WTI ended the week at $68.30 after closing the previous week at $67.19. The price of DME Oman crude ended the week at $73.85.

At the beginning of last week, we expressed the view that oil prices would move higher with support coming from the market reacting positively to President Trump ordering a large-scale assault on Houthi targets in Yemen and to China releasing its “Special Action Plan to Boost Consumption”, which is an effort to reduce reliance on exports. We also, however, stated that the price of Brent crude would struggle to break through $72 – which proved to fit closely with the actual price movement.

For the upcoming week, we think the price of Brent crude will move higher and will test $73. Oil prices will get support from the following:

• Seven members of OPEC+ reached an agreement to address previous oversupply with monthly cuts between 189,000 bbl/d and 435,000 bbl/d through June 2026. Additionally, the countries agreed to frontload the compensatory cuts. The bulk of the cuts are to come from Iraq, Kazakhstan and Russia. The revised plan aligns with our previously stated expectations that supply from OPEC+ will be relatively flat this year, with OPEC+ worrying about the extent of oil demand growth. 
• The Trump Administration placed new sanctions on Iran’s oil exports to China, including sanctions on China’s independent refiners that are referred to as “teapot” refineries (even though many of these refineries have crude distillation capacity of more than 100,000 bbl/d). While we do not expect that the sanctions will have a material effect since the associated transactions are executed using Chinese currency and with non-western shipping, the sanctions do show that the Trump administration will continue making efforts to disrupt Iranian oil exports. 
• Oil demand will be picking up as we move into warmer months for the northern hemisphere. While the Internal Energy Agency (IEA) recently reduced its demand growth forecast for 2025 from 1.10 MMbbl/d to 1.03 MMbbl/d, we are expecting that oil demand will be 1.30 MMbbl/d. We are seeing growth in U.S. demand, with gasoline demand running 1.74% more than last year during the last four weeks. Demand for diesel and jet fuel is running more than 7.0% in comparison with last year. We are also expecting China’s demand will be higher than IEA’s forecast – especially with China implementing a 30-point plan to increase consumer spending. 

A counterweight to the positive factors is the bearish sentiment of oil traders. After two consecutive weeks of increases, traders of WTI crude reduced their net long positions by adding to their short positions, which offset the slight increase in their long positions. Net long positions of WTI are 62% lower in comparison to Jan. 21 of this year when the price of WTI was $75.89. 

Another factor that will be negative for oil prices is if President Trump reverses his decision to withdraw Chevron’s license to produce and export oil from Venezuela, which requires Chevron to cease operations in Venezuela by April 3. Chevron has been exporting about 240,000 bbl/d of crude from Venezuela, which is around 25% of Venezuela’s total oil production.  It was reported last week that President Trump is reconsidering this decision.

For a complete forecast of crude oil and refined products and other energy-related fundamentals and prices, please refer to our Short-term Outlook.

About the Author: John E. Paisie, president of Stratas Advisors, is responsible for managing the research and consulting business worldwide. Prior to joining Stratas Advisors, Paisie was a partner with PFC Energy, a strategic consultancy based in Washington, D.C., where he led a global practice focused on helping clients (including IOCs, NOC, independent oil companies and governments) to understand the future market environment and competitive landscape, set an appropriate strategic direction and implement strategic initiatives. He worked more than eight years with IBM Consulting (formerly PriceWaterhouseCoopers, PwC Consulting) as an associate partner in the strategic change practice focused on the energy sector while residing in Houston, Singapore, Beijing and London.