In the opaque world of oil market forecasting, some things change, and some never do.
One of the easiest targets remains the reliance on secondary sources, which have always
been rooted in educated guesswork. Having worked in the trenches myself, including a
stint in the 1990s when I helped obscure Venezuela’s true production levels, I can attest
that secondary data was never designed to offer precision. Despite today’s advances in
satellite imagery and tanker tracking, analysts still rely on extrapolations, such as crude
flows into refineries, to infer production at the wellhead. It’s a more refined guess.
Could we see demand forecast disparities between the IEA and OPEC converge?
In 2024, the IEA came out ahead, offering more accurate projections than OPEC, whose
bullish outlook required repeated downward revisions. Both organizations carry institutional
biases, yet credit must be given where due: the IEA’s investment in training and data
partnerships with non-OECD nations is helping improve global energy transparency.
Looking to the second half of 2025, the big unknown is demand. Supply is largely automated
with OPEC+ continuing its monthly guidance. But trade wars, particularly driven by U.S.
tariff threats, are throwing sand in the gears. Markets dislike uncertainty, and Trump’s
aggressive rhetoric toward Japan and others is revising expectations downward - not
catastrophically, but significantly. Still, real-world demand is holding up better than feared.
Current estimates suggest we’re tracking close to 1 million b/d in growth.
Where does this leave oil prices?
I would call it a “sweet spot”, Brent in the mid-to-high $60s is manageable for producers
and palatable for consumers. As long as supply and demand remain roughly in sync
there’s no compelling reason to expect dramatic swings.