Brent's Narrowest Year in Two Decades Was a Standoff Between OPEC+ Restraint and American Barrels

Oil markets in 2024 had every ingredient for volatility. War in Gaza, Houthi attacks on Red Sea shipping, two direct exchanges of fire between Israel and Iran, repeated OPEC+ decisions on production and a sharp slowdown in Chinese fuel demand. Yet Brent ended the year having traded in one of the tightest ranges of the modern era. According to the US Energy Information Administration, Brent futures traded intraday between about USD 68 and USD 93 a barrel in 2024, a range of USD 24 after rounding and the narrowest since 2019.

It was the product of two strong forces cancelling each other out. The group's voluntary cuts, extended several times during 2024, kept a substantial volume of crude off the market. Brent rose through the first quarter as conflict in the Middle East intensified and Houthi attacks pushed tankers away from the Red Sea. Production from countries outside the group increased by an estimated 1.8 million barrels a day in 2024, more than offsetting the OPEC+ cuts.

The EIA estimates that global oil consumption grew by less than 1 million barrels a day in 2024, below the pre-pandemic decade's average of 1.5 million barrels a day. The most revealing feature of 2024 was how quickly geopolitical rallies faded. Brent's lowest point came in early September, at USD 69 a barrel. The EIA's January 2024 outlook expected a balanced market and a Brent average of USD 82 a barrel. The EIA's January 2025 outlook forecasts Brent falling to USD 74 a barrel in 2025 and USD 66 in 2026, as production outpaces consumption and inventories build.

On the supply side, the EIA expects US crude production to reach a record 13.5 million barrels a day in 2025 and 13.6 million in 2026, with growth slowing as lower prices reduce drilling. If these forecasts are right, the main question for 2025 is whether OPEC+ continues to withhold supply into a market that does not need it.