Citi analysts predict that Brent crude will average $60 per barrel next year, attributing the expected decline to the incoming U.S. administration’s energy policies. Donald Trump will take over the White House as the next President on January 20, 2025, after his stunning victory in the election.
The City group experts highlighted import tariffs and increased oil production as key factors behind this forecast. At present, the crude oil prices are fluctuating below $74 per barrel.
Analysts also suggested that Trump might leverage his “influence on OPEC+” to encourage the group to boost supply, including releasing oil from floating storage. They noted that Trump’s presidency could reduce geopolitical tensions, which would further weigh on prices.
Domestic energy policies could also bolster support for oil and gas investments, potentially enhancing production, Citi analysts stated, as quoted by Reuters. They added, however, that despite a more favorable agenda for oil and gas, immediate effects on physical oil markets might be limited.
Goldman Sachs analysts, in a note issued earlier in the week, remarked that the impact of a potential second Trump term on oil prices is complex, with potential short-term risks to Iran’s oil supply presenting some price upside. However, they also cited downside price risks due to Trump’s trade policies.
Another consideration is how pro-growth energy policies might simultaneously encourage production while suppressing prices, which could, in turn, lead to a pullback in production—a cycle familiar to the oil and gas industry.
“If the Trump administration opens federal leases for oil and gas, federal lands would receive 25% per barrel in revenues. Finding an oil company that can profit with only $52.50 per barrel remaining from a $70 barrel might prove difficult,” Smead Capital president Cole Smead told CNBC.
