U.S. oil and gas producers have received official confirmation of what they experienced all year: Oil prices generally declined during 2025.
The U.S. Energy Information Administration reported this week on a monthly average basis, the price of Brent crude oil — the global benchmark — declined from a high of $79 per barrel in January to a low of $63 per barrel in December, which was the lowest monthly average price since early 2021. The annual average price was $69 a barrel, the lowest since 2020, even when adjusting for inflation.
There is traditionally a $5 differential between Brent and West Texas Intermediate, the U.S. benchmark, so the EIA’s annual average price for WTI would be $64 a barrel.
Prices were pressured by supplies in the global crude oil market exceeding demand. Crude oil inventory builds in China muted some of the price decline. Events such as Israel’s June 13 strikes on Iran and attacks between Russia and Ukraine targeting oil infrastructure also periodically supported prices.
In the first half of the year, crude oil prices declined in response to slowing economic activity, which can affect global oil demand. Prices decreased in the first quarter alongside a contraction in U.S. GDP, and prices fell nearly $15 a barrel further in April amid expectations that escalating tariffs among large economies could continue to slow economic growth.
In the second half of the year, OPEC+ announcements of increased crude oil production targets for the group increased the prospect of an oversupplied market. In its most recent Short-Term Energy Outlook, EIA analysts estimated global production of crude oil and liquid fuels outpaced consumption throughout 2025, with implied stock builds of more than 2.5 million barrels per day in the final two quarters of the year. These stock builds were the largest recorded since 2000, aside from in 2020.
Generally, crude oil prices tend to decrease as global petroleum stocks increase. However, crude oil inventory builds in China likely limited price declines from the stock builds, essentially acting as a source of demand by removing barrels from the global market.
