Oil Price Drop: Risks and Possible Global Scenarios

In mid-April, global oil prices fell below $70 for the first time in two years. The price of Brent crude dropped to $68, surprising markets — especially since OPEC+ countries, including Saudi Arabia and Russia, chose not to announce new production cuts.

The key driver of the price drop is weakening global demand, particularly in China, where Q1 2025 GDP growth was just 3.8%, falling short of post-pandemic expectations. Europe’s economy remains sluggish, and signs of declining consumer spending are emerging in the U.S. as well.

This raises a key question: could oil prices drop even further?

One scenario discussed among experts is a deepening global recession. If China’s recovery falters and Europe’s growth stays minimal, a sharper decline in oil demand could push prices below $60. In this case, energy producers — especially small and mid-sized ones — would face intense financial pressure.

A second scenario is stabilization. Some forecasts suggest prices may settle between $65 and $70, as existing production limits are still in effect. Meanwhile, U.S. domestic production is growing, partially offsetting the market influence of international producers.

A third, less likely scenario involves geopolitical escalation — for example, internal unrest in Iran or intensified conflict in Ukraine. These risks could quickly push oil prices back above $80 in the short term, as markets reassess supply risks.

Importantly, the global energy market has become more diversified in recent years. The share of renewables is growing, and EV adoption is now tangibly affecting gasoline demand. Over the long term, oil prices will be influenced not only by current economic conditions, but by deeper shifts in technology and policy.

In this context, here are the three main oil price scenarios: