Global Oil Benchmarks Log Second Monthly Gain Despite Volatile June

Oil prices in June 2025 reflected a complicated combination of geopolitical tensions, production policy shifts, and evolving demand forecasts. Early in the month, prices surged above $80 per barrel as the Israel-Iran conflict escalated, injecting a significant risk premium into the market.

However, a rapid ceasefire and easing tensions led to a sharp reversal, with Brent crude settling near $67.77 and WTI at $65.52 by the end of June.

Market participants navigated these swings by closely monitoring OPEC+ policy signals and US production data. The unwinding of OPEC+ cuts and record US output added downward pressure, but overall, benchmarks managed a second straight month of gains, with Brent up 5.9% and WTI up 6.9% for June.

OPEC+ Production Policy Shapes Market Sentiment

OPEC+ continued its accelerated unwinding of production cuts, announcing plans to boost output by 411,000 barrels per day in August, building on similar increases in May, June, and July. This strategy has added 1.78 million barrels per day to global supply so far in 2025, equivalent to over 1.5% of total demand.

The group’s assertive stance has tempered price spikes by signaling a willingness to respond to market tightness, yet the gradual return of supply has not overwhelmed demand.

Saudi Arabia, Kuwait, the UAE, and Russia have led the supply increases, while US Lower 48 production faces pressure from lower prices and tightening margins.

Did you know?
Brent crude’s current price is 43% lower than its June 2022 peak but remains more than $100 above the historic negative levels reached by WTI in April 2020, illustrating the dramatic swings in oil market history.

Regional Price Gaps and Benchmark Differentials Persist

While global benchmarks like Brent and WTI have stabilized, regional price variations remain pronounced. Premium grades such as Bonny Light continue to command higher prices due to quality and refining advantages, even as their premiums narrow. Middle Eastern crudes, including Murban, trade at a premium to WTI, reflecting robust Asian demand and logistical advantages.

The OPEC basket price, averaging $68.13 in late June, serves as a key reference for the group’s production decisions, highlighting the ongoing influence of OPEC+ in global price formation.

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Supply Surplus and Demand Uncertainty Cloud Outlook

Analysts forecast a global supply surplus for the remainder of 2025, as OPEC+ production rises and US output remains near record highs. Demand growth projections have been revised downward to around 1 million barrels per day for 2025, reflecting macroeconomic headwinds and uncertainty in the world economy.

Despite these headwinds, crude oil prices are still well above pandemic-era lows and have normalized from the extreme volatility seen in 2022. The current Brent price of $67.77 represents a 43% drop from its 2022 peak but remains far above the negative prices briefly witnessed in 2020.

Oil Market Resilience Faces Further Tests

Looking ahead, the oil market remains sensitive to further geopolitical shocks, OPEC+ policy changes, and shifts in global demand. The next OPEC+ meeting on July 6 and upcoming US inventory data will be closely watched for signals on supply and demand balances.

ICE’s global oil futures and options markets are at record open interest, reflecting heightened hedging and trading activity as market participants brace for continued volatility.

While the recent gains underscore the market’s adaptability, the path forward is likely to be shaped by persistent uncertainty and the delicate balance between supply and demand.