GEAB 191

Oil: Expect a short-term rise fueled by geopolitical tensions

If you have read our overview and trends for 2025, you will know that our team is relatively optimistic that the conflicts between China and the United States and between Russia and Ukraine will be resolved in 2025. However, this will not happen immediately, and tensions will persist in other parts of the world. In the short term, sanctions have been adopted against the Russian oil trade and China appears less inclined to turn a blind eye, with three tankers under sanctions being refused entry to its ports[1]. These events are pushing up the price of oil, a trend which will continue for several months but will probably not last the year, between the easing of geopolitical tensions, the economic slowdown and, above all, the revival of US production.

Gas: A booming LNG industry and rising prices

While we anticipate a peace agreement between Ukraine and Russia in 2025, this in no way guarantees an end to sanctions on Russian gas. Furthermore, the end of the agreements governing the transit of Russian gas through Ukraine will not be re-established overnight. Clearly, the drastic fall in Russian gas supplies to European countries will not be reversed in 2025. It will continue to be the United States that will compensate for this decline, and will do so even more so under a free trade agreement with the EU. This trend, coupled with Trump’s pro-gas policies, will drive a boom in the liquefied natural gas (LNG) industry. Despite the increase in supply, prices will not decline, as demand will match, if not surpass, the significant rise in supply.