(Nairobi) – Consumers and businesses may experience some much-needed relief in the coming months, as global oil prices are projected to remain fair and largely stable for the rest of 2025. This trend is being driven by slowing demand, steady supply, and rising global oil inventories, according to a new report by the International Energy Agency (IEA).
The IEA’s latest Oil Market Report indicates that oil demand growth is expected to slow noticeably over the course of the year. From a growth rate of 990,000 barrels per day (kb/d) in the first quarter of 2025, demand is expected to fall to 650 kb/d in the following months. This slowdown is largely due to ongoing global economic uncertainty and a rapid increase in electric vehicle (EV) adoption, which is gradually replacing traditional fuel-powered transportation.
At the same time, the global oil supply is expected to remain stable and even increase modestly. The IEA forecasts that worldwide oil production will grow by 1.6 million barrels per day (mb/d), reaching an average of 104.6 mb/d for the year. Much of this increase will come from non-OPEC+ countries, which are set to add 1.3 mb/d to the global supply, despite some constraints in U.S. oil production. OPEC+ countries, which include major oil exporters such as Saudi Arabia and Russia, are also expected to slowly increase their output.
The agency also notes that the increase in oil inventories will help keep prices in check. In March alone, global oil stocks grew by 25.1 million barrels, with crude oil making up the largest portion at 57.8 million barrels. This build-up of reserves further reduces the likelihood of sudden price spikes, adding more stability to the market.
According to the IEA, oil prices began declining again in late April and early May 2025. This drop has been linked to growing trade tensions that have affected financial and commodity markets. Rising tariffs from the U.S. and higher-than-expected output from OPEC+ members have played key roles in pushing prices lower. Since April, benchmark crude prices have fallen by around $10 (KSh1,300) per barrel.
In April, Russian crude oil averaged $55.64 (KSh7,200) per barrel, with all major Russian export grades selling below the $60 (KSh7,800) price ceiling set by Western countries. Meanwhile, North Sea Dated crude, one of the key global pricing benchmarks, was trading at approximately $66 (KSh8,500) per barrel. These figures reflect a broader decline in market demand, which, combined with rising supply, has helped suppress price increases.
The World Bank’s April 2025 commodity outlook supports this outlook. It projects that Brent crude—the leading global benchmark used for pricing oil exports from regions including Africa and the Middle East—will average $64 (KSh8,300) per barrel this year. That represents a decline of $17 (KSh2,200) from last year. The World Bank forecasts Brent prices will drop further to $60 (KSh7,800) per barrel in 2026.