Crude oil prices recorded a notable decline in 2025, influenced largely by concerns over excess supply in global markets. Higher production from OPEC+ and non-OPEC producers, combined with easing demand growth, shaped market sentiment through the year.
While geopolitical developments offered intermittent support, they were insufficient to offset pressure from surplus expectations.
Crude oil benchmarks posted sharp annual declines in 2025. Brent crude futures fell by around 19% over the year, marking one of their steepest annual drops in recent times.
US West Texas Intermediate crude also registered an annual decline of close to 20%, reflecting sustained weakness across global energy markets.
OPEC+ increased crude output during 2025 in an effort to protect market share amid rising competition.
The group is scheduled to meet on January 4 and is expected to maintain its plan to pause further supply increases during the first quarter of 2026, according to market expectations.
In addition to higher OPEC+ production, increased output from non-OPEC producers contributed to surplus concerns.
At the same time, slower demand growth in key economies reduced consumption momentum, adding further pressure on crude prices through the year.
Brent crude futures recently settled at around $60.85 per barrel, while US WTI closed near $57.42 per barrel in the latest session.
On the domestic front, January crude oil futures were trading at approximately ₹5,212 on the Multi Commodity Exchange during early trade, marginally lower than the previous close.
Despite the broader downtrend, crude prices found some support from geopolitical tensions, trade policy uncertainties, and sanctions affecting oil-producing nations such as Russia, Iran, and Venezuela.
These factors helped limit downside pressure at various points during the year.
Recent data from the US Energy Information Administration indicated a decline in crude oil inventories for the week ending December 26. Commercial crude stockpiles fell by 1.9 million barrels, while gasoline and distillate fuel inventories recorded increases, reflecting mixed signals from the supply-demand balance.
Crude oil prices in 2025 were shaped primarily by expectations of a global supply surplus and moderating demand. While geopolitical developments and inventory trends provided intermittent support, the overall market remained under pressure as supply-side factors continued to dominate pricing dynamics.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Published on: Jan 1, 2026, 12:06 PM IST
Neha Dubey
Neha Dubey is a Content Analyst with 3 years of experience in financial journalism, having written for a leading newswire agency and multiple newspapers. At Angel One, she creates daily content on finance and the economy. Neha holds a degree in Economics and a Master’s in Journalism.
Know MoreWe're Live on WhatsApp! Join our channel for market insights & updates
Get the link to download the App
