As we enter the second half of 2025, oil markets appear to have found an uneasy equilibrium. Brent crude

has averaged $70.80 so far this year, but the wild volatility many expected from geopolitical crises has not

materialized. Despite wars, sanctions, and trade turmoil, the market is anchored in the $65 to $70 range, a

zone that may well define the rest of the year.

This surprising price stability stems from three key realities. First, the global economy, while far from

booming, is proving more resilient than many feared. Trade tensions remain, but new agreements, even if

accompanied by 10% tariffs, are less disruptive than the worst-case scenarios. This resilience, combined with

a gradually weakening dollar, provides modest support for oil demand, especially in non-dollar currencies

where oil has become relatively cheap.

Second, market sentiment around China has likely bottomed out. For much of the year, analysts have been

overly pessimistic about Chinese demand due to its economic slowdown and electric vehicle transition.

However, that sentiment may now be reversing, as the data suggests baseline oil consumption in China

remains substantial. Meanwhile, when prices dip into the low-to-mid $60s, U.S. shale production visibly

contracts, offering a natural floor to prices.

The third and perhaps most underappreciated factor is the complex but pivotal evolution in OPEC+ behavior.

While quota increases dominate the headlines, the actual barrels hitting the market have been fewer than

expected. The OPEC system today is tangled in compensation cuts, overlapping commitments, and erratic

compliance, creating confusion and adding a bearish layer of uncertainty. Yet this confusion also slows the

pace of real supply increases, delaying the impact on prices until at least Q4.

Indeed, more physical barrels are likely to reach the market later this year, especially as peak summer

demand fades and domestic crude burn in Gulf countries subsides. That shift could weigh on prices in the

final quarter. But until then, the structure of the market, coupled with lingering geopolitical risks, particularly

from Iran, should keep Brent buoyant in the $65–$70 band.

In short, oil markets are no longer governed by headline risk alone. They are adapting to a multipolar world of

cautious trade, strategic supply maneuvers, and resilient demand. Unless a truly disruptive shock emerges

this summer’s price calm may hold longer than most expect.