As global energy markets continue to navigate uncertainty driven by geopolitical tensions, economic slowdowns, and shifting consumption patterns, HSBC has lowered its forecast for Brent crude oil prices over the next two years. The bank’s revised outlook suggests that prices may remain below previous expectations, raising concerns for oil-dependent economies and energy sector investors.
New Forecast: $68.5 in 2025, $65 in 2026
According to HSBC’s latest mid-April 2025 report, the average Brent crude oil price for this year is now expected to be $68.5 per barrel, down from earlier projections.
Looking ahead to 2026, the bank anticipates a further decline, with prices averaging around $65 per barrel, signaling a likely continuation of the downward trend or at best, stabilization at lower price levels.
Key Factors Behind the Downgrade
HSBC analysts cited several key reasons for this revision:
- Weaker global demand growth: As highlighted by the International Energy Agency (IEA), global oil demand is expected to grow by just 0.7 million barrels per day in 2025.
- Increased supply from the U.S. and non-OPEC producers, especially in liquefied natural gas (LNG) and shale oil.
- High inventory levels and lower post-winter consumption, particularly in Europe and parts of Asia, following a relatively mild winter season.
- The rise of renewable energy projects and energy transition policies, gradually reducing long-term fossil fuel demand.
Implications for Markets and Producers
This downward revision serves as a warning to nations that rely heavily on oil revenues. Lower-than-expected prices may result in:
- Budget shortfalls for oil-exporting countries
- Delayed exploration and field development projects
- Intensified competition among producers to maintain market share
For energy companies involved in upstream operations, refining, or exports, these forecasts underscore the need to reassess investment plans and tighten cost management.
HSBC’s reduced oil price outlook sends a strong signal: the era of comfortably high oil prices may be over. With the market entering a new phase of volatility and demand uncertainty, producers and consumers alike must prepare for an evolving energy landscape—one defined by diversification, policy shifts, and strategic adaptation.
