Oil's Unraveling: Why Analysts Are Turning Bearish on Chevron, Equinor, and Murphy Oil

The oil sector’s golden era may be fading fast. In 2025, top analysts at Barclays and Redburn have delivered a stark warning: falling oil prices, macroeconomic headwinds, and industry-specific pressures are reshaping the landscape for major players like Chevron (CVX), Equinor, and Murphy Oil (MUR). These downgrades, rooted in fundamental shifts in supply-demand dynamics and corporate strategy, underscore a sector in transition—one where cost discipline and valuation discipline are now survival tools.

Chevron: Overvalued and Overexposed

Barclays cut Chevron to Equal Weight, signaling skepticism about its ability to manage costs in a weak market. The firm emphasized that oil majors must “flex spending plans” to avoid overextension as oil prices slide. Meanwhile, Redburn’s Sell rating for Chevron reflects deeper concerns: the stock “screens as expensive versus peers,” and the firm forecasts Brent crude dropping to $57.50 by year-end, a 40% decline from 2024 highs.

The math is stark. If oil prices hit $60/barrel—Barclays’ upper 2025–2026 forecast—Chevron’s margins could compress sharply. Add U.S. tariffs on energy imports, which Redburn cites as a demand-killer, and the picture grows murkier.

Equinor: The Gas Narrative Crumbles

Redburn’s Sell on Equinor points to a fading tailwind: the company’s reliance on gas prices, which analysts argue are losing momentum. With global energy demand increasingly bifurcated—strong in renewables, weak in fossil fuels—Equinor’s growth story is under siege. The firm’s sensitivity to European gas markets, where prices have fallen by over 25% since early 2024, is now a liability.

Murphy Oil: Costly Bet on Volatility

Barclays’ Underweight on Murphy Oil highlights an even bleaker reality. The firm’s Q1 2025 earnings will hinge on costly development programs, while its revenue has already plummeted 20.5% year-on-year. Analysts at Morgan Stanley and Piper Sandler have slashed price targets, with Scotiabank’s $22.00 target (down from $36.00) reflecting a sector-wide devaluation. Murphy’s average 12-month price target now sits at $31.38, a 14.43% drop from earlier estimates—a clear signal of investor disillusionment.

The Broader Storm Brewing

The downgrades aren’t isolated. Barclays and Redburn both point to a 1 million barrels per day surplus in 2025, driven by oversupply and weak demand. Redburn’s $57.50 Brent forecast clashes with current prices (~$72/barrel), implying a 20% correction is looming. U.S. tariffs on crude and refined products—now affecting 15% of global trade—compound the pain, squeezing margins for exporters like Murphy and Chevron.

Even peers like Shell and TotalEnergies, which Redburn keeps at Buy, benefit from stronger cash flows and diversified portfolios. For the others, survival hinges on two factors: cutting costs faster than prices fall and avoiding overcommitment to projects that may never turn profitable.

Conclusion: A Sector in Relentless Decline

The writing is on the wall for Chevron, Equinor, and Murphy Oil. With oil prices forecast to average $60–$65/barrel (Barclays) or $57.50 (Redburn) in 2025, the math for high-cost producers is brutal. Murphy’s 20.5% revenue collapse and Chevron’s valuation missteps underscore a sector-wide reckoning.

Investors should note:
- Valuation risks: Murphy’s price targets have dropped 14.4% since 2024, reflecting skepticism about its ability to adapt.
- Supply-demand imbalance: A 1 million bpd surplus in 2025 could force deeper cuts in capital spending.
- Policy headwinds: U.S. tariffs and global decarbonization policies are structural threats, not temporary setbacks.

In this environment, caution reigns. Unless oil prices rebound sharply—and there’s little catalyst for that—these stocks face a prolonged period of underperformance. The era of easy profits for traditional oil giants is over. For now, the market’s message is clear: run from the laggards, and bet on the survivors.