Oil markets in 2024 had every ingredient for volatility. War in Gaza, Houthi attacks on Red Sea shipping, two direct exchanges of fire between Israel and Iran, repeated OPEC+ decisions on production and a sharp slowdown in Chinese fuel demand. Yet Brent ended the year having traded in one of the tightest ranges of the modern era.
According to the US Energy Information Administration, Brent futures traded intraday between about USD 68 and USD 93 a barrel in 2024, a range of USD 24 after rounding and the narrowest since 2019. Adjusted for inflation, it was the narrowest since 2003. Brent futures averaged USD 80 a barrel for the year, USD 2 less than in 2023, while the EIA's separate look back at its forecasts puts the 2024 average spot price at USD 81.
The narrow range was not a sign of calm. It was the product of two strong forces cancelling each other out.
The forces holding prices up
The first was OPEC+ restraint. The group's voluntary cuts, extended several times during 2024, kept a substantial volume of crude off the market. The EIA estimates that OPEC+ members reduced production by about 1.3 million barrels a day in 2024. Each announced delay to the planned unwinding of cuts, in June and again in September, produced a short rally.
The second was geopolitical risk. Brent rose through the first quarter as conflict in the Middle East intensified and Houthi attacks pushed tankers away from the Red Sea. The spot price climbed from a monthly average of USD 78 in December 2023 to USD 89 in April 2024 and reached its 2024 peak of USD 93 on 12 April, amid fears that tension between Iran and Israel would escalate into a wider conflict that disrupted supply.
The forces holding prices down
Against that, supply outside OPEC+ kept rising. Production from countries outside the group increased by an estimated 1.8 million barrels a day in 2024, more than offsetting the OPEC+ cuts. US crude output reached a monthly record of 13.5 million barrels a day in October 2024. The United States, Canada, Guyana and Brazil together increased liquids production by about 1.1 million barrels a day over the year.
Demand was the other weight. The EIA estimates that global oil consumption grew by less than 1 million barrels a day in 2024, below the pre-pandemic decade's average of 1.5 million barrels a day. China was the main source of disappointment. Weak economic activity, LNG trucks and electric vehicles all limited growth in transport fuel use, a trend the EIA says it had flagged as a source of weakness at the start of the year.
Why the risk premium faded
The most revealing feature of 2024 was how quickly geopolitical rallies faded. Brent's lowest point came in early September, at USD 69 a barrel. In early October, ahead of an expected Israeli response to an Iranian attack, prices rose to USD 82 on 7 October, but they fell back once it became clear that Israel's strike had not targeted Iran's oil infrastructure.
The EIA's explanation is straightforward. The conflict did not disrupt physical supply, and Red Sea diversions raised costs but did not cut volumes, because exporters found alternative routes. A market with spare capacity in OPEC+ and rising non-OPEC+ supply can absorb fear without lasting price effects, so long as actual barrels keep flowing. Traders learned during the year to sell rallies driven by headlines rather than lost supply.
A forecast that held
The EIA's January 2024 outlook expected a balanced market and a Brent average of USD 82 a barrel. The outcome was USD 81, with global inventories drawing down only slightly, by about 0.18 million barrels a day. The forecast was less accurate within the year: prices ran above it in April and below it in the fourth quarter, when Brent averaged USD 75 against a forecast of USD 81. On an annual basis, though, the balanced-market view proved correct.
That accuracy matters because it suggests the market's structure, not luck, produced the narrow range. Strong non-OPEC+ supply, slow demand growth and OPEC+ restraint are predictable forces, and when they roughly offset each other, prices are anchored.
Diminishing returns for OPEC+
The more uncomfortable conclusion is for OPEC+. The EIA notes that Brent averaged USD 74 a barrel in December 2024, lower than the USD 85 average in April 2023 when the group announced its first round of additional cuts. Production restraint has bought short rallies but not sustained higher prices, while countries outside the group have taken market share.
The EIA's January 2025 outlook forecasts Brent falling to USD 74 a barrel in 2025 and USD 66 in 2026, as production outpaces consumption and inventories build. The latest OPEC+ agreement, in December 2024, pushed the timeline for relaxing some cuts into 2026. The EIA raises the possibility directly: if cuts continue to deliver diminishing returns in price and revenue, dissent within OPEC+ could grow, with some members raising output unilaterally or leaving the agreement.
That is a notable statement from a statistical agency, and it identifies the main risk to the narrow-range pattern. If OPEC+ cohesion breaks, the floor under prices weakens.
What could break the range in 2025
There are several plausible routes out of the 2024 equilibrium. New sanctions are one. The EIA notes that its January forecast was completed before the United States imposed additional sanctions on Russia's oil sector on 10 January 2025, which could reduce Russian exports. Iran is another, given continuing tension in the Middle East.
On the supply side, the EIA expects US crude production to reach a record 13.5 million barrels a day in 2025 and 13.6 million in 2026, with growth slowing as lower prices reduce drilling. On demand, it forecasts that India, other Asian economies excluding China and Japan, and emerging markets in the Middle East and Africa will drive consumption growth of 1.3 million barrels a day in 2025 and 1.1 million in 2026, still below the 2010 to 2019 average.
If these forecasts are right, the main question for 2025 is whether OPEC+ continues to withhold supply into a market that does not need it. The answer will determine whether the narrow range of 2024 gives way to a lower one.