UBS has moderately increased its Brent crude oil forecast for 2025, attributing this to heightened geopolitical risks. Nonetheless, the bank continues to maintain a cautious perspective, emphasizing the potential for increasing supply surpluses amid falling seasonal demand.

In a recent note, UBS raised its 2025 Brent price forecast by 1 dollar to 67 dollars per barrel. This change reflects ongoing tensions in the Middle East following the Q2 Iran-Israel conflict, which temporarily pushed oil above 80 dollars per barrel. However, prices have since declined as the risk of disruption has subsided.

Short-Term Outlook vs. Long-Term Pressure

For the third quarter of 2025, UBS expects Brent to average 65 dollars, up from a previous forecast of 62 dollars. However, analysts predict that prices could retreat into the low 60s by late 2025, barring new geopolitical disturbances.

“With disruption to Middle Eastern oil supply not appearing as an immediate risk, we expect oil market dynamics to revert to fundamental analysis, which looks bearish near-term,” the bank remarked.

The factors influencing this shift include:

• OPEC+ production increases, anticipated to continue in August
• Declining summer demand as seasonal fuel usage reaches its peak
• Rising inventories as production surpasses consumption

Potential Surpluses Could Lower Prices Below 60

UBS cautioned that additional OPEC+ supply increases or lower global demand could potentially pull Brent below 60. Conversely, tighter production compliance or new conflicts could push prices upward.

“Key dates to monitor include the OPEC+ decision on August production on July 6, but we regard the following decision in early August as a more significant indicator,” analysts noted.

Stay Updated on Market Data

To stay informed on these developments, investors can leverage:

Commodities API for real-time oil prices and historical trends regarding Brent, WTI, and other essential commodities. This enables investors to contextualize UBS’s forecast against actual market movements.

Economics Calendar API for updates on OPEC+ announcements, inventory reports, and macroeconomic data that could influence oil prices worldwide.

Future Outlook

While UBS’s forecast reflects a slightly bullish sentiment in the short term, the overarching narrative for the oil market appears increasingly bearish. Unless production discipline is restored or demand surprises to the upside, Brent may struggle to stay above 65 dollars through the end of the year.

OPEC+’s upcoming August production strategy may serve as a critical turning point for the market.