Oil’s Hidden Discount: Why Barrels Are a Bargain in Euros

The global oil market in April 2025 has been a rollercoaster of volatility, with Brent crude prices plunging below $60/bbl—the lowest in four years—before stabilizing around $65/bbl. Meanwhile, the U.S. dollar’s value against the euro cratered to €0.868 by mid-April, its weakest level in years. This convergence of falling oil prices and a depreciating dollar creates a compelling opportunity: crude oil is cheaper for investors using euros than it has been in years.

The Oil Price Plunge: A Dollar-Driven Decline

The drop in oil prices was fueled by a mix of geopolitical and economic factors. U.S.-China trade tensions, with tariffs squeezing global demand, and OPEC+’s accelerated production increases—led by overcompliance from Kazakhstan and Iraq—pushed prices to multiyear lows. By April 21, Brent futures had retreated to $65/bbl, down 15% from March highs. Yet, this decline is far less severe when viewed through the lens of the euro.

The Euro’s Power Play: A Hidden Discount

The U.S. dollar’s weakness amplified oil’s affordability for euro holders. At the April 21 nadir, when the USD/EUR rate hit €0.868, $65/bbl of oil equated to just €56.42/bbl—a stark contrast to the average euro price of €58.73/bbl when calculated using April’s average exchange rate of €0.9035. Investors purchasing oil in euros effectively gained a 4% discount compared to the month’s average.

This dynamic isn’t temporary. The U.S. dollar’s year-to-date (YTD) decline of 9.18% against the euro suggests further erosion of the dollar’s purchasing power. If the USD/EUR rate stays below €0.90—a likely scenario given persistent trade tensions—the euro’s buying power for oil will remain elevated.

The Supply-Demand Outlook: A Buyers’ Market

The fundamentals also favor bargain hunters. The IEA revised 2025 oil demand growth downward to just 730 kb/d, citing weaker global GDP forecasts. Meanwhile, non-OPEC+ supply is set to rise by 1.3 mb/d in 2025, with Brazil, Guyana, and Canada leading the charge. Even OPEC+’s production overhang—exemplified by Iraq’s 390 kb/d excess output—adds to oversupply risks.

For euro-based buyers, this oversupply means lower prices. The Short-Term Energy Outlook (STEO) forecasts a 2025 annual average Brent price of $68/bbl, but in euro terms, this equates to €60.28/bbl using the April average exchange rate—a 12% discount to 2023’s €68.50/bbl average.

Risks and Considerations

• Geopolitical Volatility: OPEC+ policy shifts or a sudden tariff truce could destabilize prices.
• Economic Slowdown: A deeper-than-expected global recession could depress demand further.
• Currency Fluctuations: A rebound in the USD could erase euro-based gains.

Yet these risks are balanced by the STEO’s 2026 forecast of $61/bbl—a price that would translate to just €52.77/bbl if the USD weakens to €0.865. For long-term investors, this trajectory suggests a multiyear buying opportunity.

Conclusion: The Euro’s Edge in Energy Markets

The data is clear: euro-denominated oil prices are at their lowest in years, with the April 2025 lows offering a rare entry point. At €56/bbl (using the weakest USD/EUR rate), crude is priced below its 2021 lows in euro terms—a period of extreme pandemic-driven demand destruction. Even the 2025 average euro price of €58.73/bbl represents a 17% discount to 2023’s average.

For investors, this is a asymmetric bet:
- Upside: A dollar rebound or demand recovery could push prices higher.
- Downside: Further declines are cushioned by the 2021 lows in euro terms.

The math is compelling. When oil is priced at $65/bbl and the USD is at €0.87, euro holders are paying less than they did for $80/bbl oil in 2023. In a world of geopolitical uncertainty, this is a rare value proposition—one that savvy investors should not overlook.