Oil Price Drop Affected by Conflicts

Oil prices have been volatile in recent weeks, reaching their lowest level in months due to an oversupply and various geopolitical issues.

In this article, we'll explore recent Brent and WTI oil barrel prices, forecasts for supply growth in 2025, and how conflicts in Russia, Ukraine, Israel, and Hamas may be affecting the market.

We will also address the impact of the trade conflict between the United States and China on oil prices and the possible slowdown in American shale production, a crucial factor for the energy sector.

Falling Oil Prices and Current Situation (10/17/2025)

Oil prices are experiencing a sharp decline amid a complex market scenario.

On the day October 17, 2025, the barrel of Brent oil was quoted at US$ 60.98, while WTI marked US$ 57.35.

This phenomenon is strongly linked to an oversupply in the market, which predicts an increase of 2.2 million barrels per day in 2025, as mentioned in G1 website

Additionally, geopolitical tensions intensify this drop in prices.

Conflicts in Russia and Ukraine, as well as tensions between Israel and Hamas, add a layer of uncertainty to the market, as analyzed in detail in a publication of Valor.

However, there are signs of progress towards peace, which can contribute to a additional reduction of prices

Furthermore, the trade conflict between the United States and China directly affects oil prices.

The uncertainty caused by this dispute not only impacts industrial production and international trade but also generates apprehension among investors.

Given this turbulent global scenario, oil prices may remain under pressure throughout the year, leading to possible significant economic developments.

Supply and Demand Projections for 2025

With the forecast of an increase of 2.2 million barrels per day in global oil supply in 2025, the market faces significant price pressure.

Trade tensions between the United States and China were expected to influence international production and trade, but the projection of high supply leaves no doubt about the abundance of this resource.

A importance of this increase lies in the direct impact on prices, since a supply much higher than demand would put downward pressure on market values.

This movement is intensified by the conflict in Ukraine and Russia, in addition to tensions involving Israel and Hamas.

At the same time, the demand substitution for renewable energy or other sources is gaining traction, in part, due to declining forecasts for oil demand growth.

A original expectation for demand was adjusted downwards, amplifying the possibility of an inevitable oversupply.

The impact of this reallocation in consumption is twofold: not only does it negatively influence prices but it also reduces interest in new investments in the oil sector.

• 2.2 million barrels/day of projected increase in supply
• Expectation of decrease in global demand
• Price measurement US$ 60.98 to Brent and US$ 57.35 for WTI in October 2025

Geopolitical Tensions and Impact on Prices

Geopolitical tensions have a significant impact on the global oil market, particularly conflicts Russia–Ukraine It is Israel-Hamas.

These clashes directly affect the stability of oil prices, as they involve producing regions and critical energy transport routes.

In the case of Russia–Ukraine, the influence is notable due to Russia's relevance in the global energy market.

The clashes have resulted in sanctions and uncertainty, worsening volatility and potentially reducing global oil supply.

According to experts, a peace agreement between these nations could reduce prices by increasing investor confidence, as discussed in recent analysis.

At the same time, conflicts between Israel and Hamas affect the perception of risk in the Middle East, a crucial region for oil supplies.

Permanent tension raises indirect costs and may restrict oil exports.

However, peace negotiations are fundamental, as they have the potential to reduce the perception of risk and, consequently, soften upward pressure on prices.

This is reflected in the recent expectation of a drop of up to 2%, as analysts point out.

When considering the impact of these tensions, it becomes clear that diplomatic breakthroughs are crucial to stabilizing the market, as well as realigning expectations and price forecasts.

A peaceful scenario would not only boost supply, but also stimulate international trade, adjusting prices according to more predictable conditions and less subject to abrupt events.

US-China Trade Conflict and American Shale Production

The trade conflict US-China directly interferes with oil prices, generating volatility and uncertainty.

The escalation of tensions between the two largest economies in the world raises questions about global energy demand.

Amid tariffs and disputes, investors remain cautious about growth forecasts, putting downward pressure on oil prices.

This movement reflects expectations for global production and consumption.

According to experts, the consequences of the conflict are taking a toll on WTI to remain below the US$ 60, as evidenced in this analysis.

The implication of a WTI price below US$ 60 and significant for the American shale industry, which needs higher prices to maintain its profitability.

This can lead to a reduction in the production of oil, harming the growing industry.

The projected global supply increase in 2.2 million barrels per day in 2025 makes this situation worse.

Below is a table summarizing possible WTI price scenarios and their impacts:

Oil prices reflect a complex interplay of factors, and the current scenario suggests that volatility may continue.

Monitoring geopolitical tensions and supply and demand dynamics will be essential to understanding the future of the oil market.