Barclays cuts 2025 Brent forecast as trade tensions and OPEC+ adjust production strategy

Barclays on Monday cut its 2025 Brent forecast by $4 to $70 a barrel and set its 2026 forecast at $62 a barrel, citing a "bumpy fundamental outlook" as trade tensions escalate and OPEC+ adjusts its production strategy.

Despite "much better-than-expected" developments in oil market fundamentals at the start of 2025, the bank now expects a surplus of 1 million bpd this year and 1.5 million bpd in 2026.

Barclays warned that the market's "limited shock absorption capacity" could leave prices vulnerable in the short term.

Barclays noted that while demand remained resilient, driven by stronger consumption and a stabilizing housing market, the overall macro outlook had deteriorated.

"The sharp increase in trade barriers has hit economic activity, while recent forward purchases appear to have made the economy appear more optimistic," the report said.

Barclays Bank proposed two potential scenarios: If trade tensions ease and OPEC+ adjusts its stance, Brent crude oil prices could average $75 per barrel; but if demand is weak and OPEC+ maintains its current course, prices may "hover in the $50-55 range for a long time."

Barclays said: "Despite fairly strong spot fundamentals, we believe oil prices are likely to be volatile in the coming months.