Geopolitical Tensions Fail to Shake Oil Markets as Attention Turns to 2025 Oversupply Risks
1min read Goldman Sachs has reported that geopolitical risk premiums in crude oil futures remain limited, as tensions between Israel and Iran have not significantly impacted supply. This is largely attributed to high spare capacity among major oil producers. Analysts including Yulia Zhestkova Grigsby indicate that as market concerns ease, attention is shifting back to the risk of oversupply in 2025.
The bank notes that while there is anticipation of a surge in supply from non-OPEC+ oil-producing countries by 2025, this is not guaranteed. Forecasts from various agencies range between 900,000 and 1.9 million barrels per day. Goldman Sachs projects a supply increase of 1.5 million barrels per day for these countries next year, with an average price expectation of $76 per barrel.
This outlook reflects an environment where the geopolitical impact on oil prices remains constrained by available excess capacity. As a result, the market's focus may continue to pivot away from short-term geopolitical risks and towards longer-term supply and demand dynamics.
