Why Did Brent Crude Oil Prices Fall Nearly 18% in 2025?

Brent crude oil prices fell nearly 18% in 2025, marking one of the sharpest annual declines in recent years. The fall came despite a year filled with wars, sanctions and geopolitical tensions that usually support higher oil prices. Instead, rising supply and weaker demand played a bigger role in shaping the market.

Early Gains in Crude Oil Prices Were Driven by Geopolitical Tensions

At the start of 2025, crude oil prices moved higher due to fresh geopolitical risks. Tougher sanctions on Russia disrupted oil flows to key buyers like China and India. At the same time, the Ukraine war intensified, with attacks damaging Russian energy infrastructure and affecting exports from nearby regions.

Tensions in the Middle East also raised supply concerns. A short conflict involving Iran and Israel increased fears of disruption in the Strait of Hormuz, a vital route for global oil shipments. These risks helped push Brent prices up in the early months of the year.

OPEC+ Output Increases Shift the Market

The direction of crude oil prices changed as OPEC and its allies steadily increased production. Since April, OPEC+ released around 2.9 million barrels per day into the market. This additional supply arrived when demand growth was already slowing.

Although the group later decided to pause output hikes for the first quarter of 2026, the market was already well supplied. As a result, traders focused more on surplus oil than on geopolitical risks, pushing Brent prices lower.

Weak Global Demand Weighs on Crude Oil Prices

Concerns about the global economy further pressured crude oil prices. Higher U.S. tariffs raised fears of slower trade and weaker economic growth. When growth slows, fuel consumption in industries, transport and shipping usually declines.

This led to lower demand expectations for oil across major economies. Even ongoing conflicts and sanctions on countries such as Iran and Venezuela failed to support prices for long, as supply continued to outpace demand.

Read more: Last Chance to Claim Your Income Tax Refund: File Your ITR by December 31.

Conclusion

Brent crude oil prices fell nearly 18% in 2025 because rising supply and slowing demand outweighed geopolitical risks. While wars and sanctions caused brief price spikes, oversupply and economic concerns ultimately drove prices lower, shaping one of the weakest years for crude oil prices in recent times.

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