SINGAPORE (Reuters) – Global oil prices are expected to stay in the $70 to $80 per barrel range in 2025, similar to 2024, while geopolitical risks create uncertainty around supply, Russell Hardy, CEO of Vitol, the world’s largest independent oil trader, said on Thursday.
World oil prices have been capped by concerns about an unwinding of OPEC+ supply cuts in 2025 and China’s weak oil demand growth despite risks of supply disruption in the Middle East.
“There’s clearly a little bit of concern about the balances for 2025 and that’s what’s driving the market today,” he said at the FT Commodities Asia Summit.
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However, there’s still a lot of geopolitical tensions, unknowns around the Middle East, around Iranian exports and Venezuelan exports under the new U.S. Trump presidency, he said.
“So I think it’s a little premature to conclude that the market is going to be oversupplied in 2025,” he said.
China faces a squeeze on supplies of cheap Iranian crude, which make up about 13% of imports by the world’s biggest importer of oil, if Donald Trump ramps up enforcement of sanctions on Tehran after his return as U.S. president in January.
Janet Kong, CEO of Singapore-based Hengli Petrochemical International, said there is currently 4 million barrels per day (bpd) of spare oil capacity globally, reducing concerns about supply.
Instead, she expects fuel demand growth in China and India, the world’s No. 2 and 3 oil consumers, to drive global oil prices in 2025.
Weak fuel demand and export constraints have led to a drop in Chinese refining utilization rates to below 80%, which is “very low” by industry standards, said Kong, who heads the trading arm of Chinese producer Hengli Petrochemical.
Chinese refining margins are unlikely to recover in the near term, she said.
Vitol’s Hardy said China’s oil demand is expected to grow by 700,000 bpd in 2025.
“It’s not as strong as last two to three years, but it was never going to be as strong as we are recovering from the pandemic,” he said, adding that China’s growth in 2025 would be more normal than in the past two years.
(Reporting by Florence Tan, Emily Chow and Siyi Liu; Additional reporting by Ashitha Shivaprasad in Bangalore; Editing by Jamie Freed and Christian Schmollinger)
