Global oversupply drove Brent crude down to $63 in December 2025

Brent crude fell to its lowest level since 2021, as persistent oversupply throughout 2025 weighed on prices despite isolated geopolitical tensions and China’s strategic stockpiling.

January 6, 2026 Rudy Vervant

Countries	Chine, Israël, Iran, Russie, États-Unis
Companies	OPEP, Energy Information Administration
Sector	Pétrole
Theme	Marchés & Finance

Brent crude oil prices declined steadily throughout 2025, falling to $63 per barrel in December, marking the lowest monthly average since early 2021. The drop occurred amid a persistent global surplus, with production consistently outpacing demand, according to data from the Energy Information Administration.

Downward pressure intensified by OPEC+ and economic outlook

The year began with prices at $79 per barrel, but a contraction in US economic activity during the first quarter and growing trade tensions between major economies triggered expectations of weakened global demand. In April, prices dropped by nearly $15 per barrel, reinforcing a downward trend that remained throughout the year.

In the second half of 2025, the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) raised production targets, contributing to concerns over an already oversupplied market. Global inventories rose sharply, with estimated stock builds exceeding 2.5 million barrels per day in the last two quarters, marking the largest increases since 2000 outside of 2020.

Geopolitical tensions had limited price impact

Despite several major geopolitical incidents — including Israeli strikes on Iran on June 13 and mutual attacks between Russia and Ukraine targeting oil infrastructure — the resulting price increases were short-lived. These temporary effects were quickly offset by the underlying market imbalance.

Large-scale inventory builds in China partially limited price declines by absorbing barrels from the global market. However, this demand buffer proved insufficient to stabilise prices given the scale of the global supply-demand gap.

Annual average price hits multi-year low

The annual average price of Brent settled at $69 per barrel, the lowest in real terms since 2020. Adjusted using the Gross Domestic Product (GDP) Implicit Price Deflator, the figures confirm a structurally weaker price environment despite episodic disruptions.

The 2025 trend may prompt industry players to reassess production and storage strategies, as tightening margins exert financial pressure. The observed movements underscore the central role of growth expectations and supply-demand balance in shaping global oil price dynamics.