EIA vs Rekon Brent price forecasts for 2025: a story of both convergence and divergence

At Rekon, we continuously refine our projections to ensure they reflect the most up-to-date market conditions. On January 18th, we forecasted that Brent crude oil prices would decline from around $78 in January to $75 by July, followed by a sharp rebound by December. Shortly after, on January 22nd, the US Energy Information Administration (EIA) released its forecast, projecting a similar downward trend but a continued decline to $72 by year-end. However, market conditions shifted significantly following the inauguration of the Trump administration on January 20th. Recognizing the impact of the associated policy shift, we revised our model on January 28th. Our updated forecast anticipates Brent prices will start the year at around $79, declining to $74 by June, then rising more moderately than previously projected, to around $80 by December.

Three reasons for the differences in our forecasts

• Impact of sanctions on Russian oil: Our initial January 18th forecast incorporated the effects of sanctions imposed by the Biden administration on Russian oil. The EIA’s forecast from January 10th by their own admission did not account for these sanctions, partially resulting in a more extended price decline in their projections.

  
  

• Policy shifts under the Trump administration: Our January 28th revision factored in the pro-fossil fuel stance of the newly inaugurated Trump administration. This created a more favorable environment for oil producers, moderating the price rebound in the latter half of the year compared to our initial projection.

  
  

• An uptick in global economic output and the influence of OPEC+: Despite the policy changes, we still expect prices to rise in the second half of 2025. This is driven by two key factors: On the one hand, a moderate uptick in global economic output will bolster demand for oil. On the other, OPEC+’s decision to delay increasing output until April and extend full production cut unwinds until the end of 2026. By flattening the slope of month-over-month increases, OPEC+ has effectively removed a significant amount of oil from the 2025 supply plan, preventing market oversupply.

The Importance of Dynamic Modeling

Our evolving forecasts highlight why dynamic modeling is essential in today’s rapidly changing world. Markets are influenced by a multitude of factors—policy changes, geopolitical developments, and supply-side decisions—that can shift expectations within days. At Rekon, our customers can stay ahead of these changes by accessing our dedicated energy and commodities forecast dashboard, where they can model price movements based on the most current data. In a volatile energy landscape, having the ability to adjust forecasts dynamically ensures that businesses and investors make informed, timely decisions.