Oil prices creep up, expected to stay elevated through summer – Rystad Energy Oil Market Update

Global liquids demand is expected to grow by just 700,000 barrels per day (bpd) in 2025.

In contrast, supply is projected to increase by 2.2 million bpd, with non-OPEC+ countries contributing around 75% of that growth.

Crude and condensate account for 1.8 million bpd of the overall supply increase.

Despite the headline surplus, Rystad Energy continues to view the crude oil balance as constructive for the Northern Hemisphere summer.

Refinery crude demand is set to rise by 2 million bpd over the summer, which should tighten balances.

Additionally, higher-than-normal temperatures are likely to drive increased crude demand for power generation, especially in heat-stressed regions.

Iran remains a key variable in the supply outlook.
If a deal is reached, Iran could bring an additional ~500,000 bpd to the market by the end of 2025, with further upside in 2026 and onward depending on the level of future investment
Current estimates suggest that Iranian production has rebounded despite ongoing sanctions, largely due to continued purchases by China.

However, the addition of several Chinese independent refiners (“teapots”) and a trading firm in Singapore to the sanctions list introduces downside risk.

This could reduce Iranian exports by as much as 500,000 bpd.

In the event of a direct military confrontation involving Iran, the supply impact could be significantly larger.

While OPEC+ retains spare capacity to respond, any disruption in the Strait of Hormuz could complicate regional logistics and delay supply adjustments.