The World Bank predicts a decline in oil prices over the next two years.

The World Bank forecasts a decline in commodity prices in 2025-2026. However, they will remain above pre-COVID levels.

This information is reported by RBC-Ukraine citing the Global Economic Prospects of the World Bank for January 2025.

As noted in the review, after a drop of about 3% in 2024, a further decrease in commodity prices is expected by 6% in 2025 and by 2% in 2026, bringing prices down to the lowest level since 2020.

"Nevertheless, most commodity prices remain significantly above pre-pandemic levels, supporting economic activity in many exporting countries," the report states.

Oil Prices

According to the World Bank, the average price of Brent crude oil was $80 per barrel in 2024, which is approximately 3% lower than the previous year, but 40% higher than the average for 2015-2019.

This annual price decline reflected sufficient global oil supply considering modest consumption growth, which offset the impact of escalating geopolitical tensions, the report indicates.

Under the baseline scenario, Brent crude oil prices are expected to decrease further, averaging $72 per barrel in 2025 and $71 per barrel in 2026.

The anticipated price drop is attributed to increased supply from non-OPEC+ countries, primarily Brazil, Canada, Guyana, and the USA, combined with moderate global oil demand growth due to slowing oil consumption in China and developed economies.

A significant risk to the oil price forecast may materialize if OPEC+ cancels supply cuts based on the announced schedule. Meanwhile, the recent strengthening of the US dollar could further reduce global oil demand and prices if it persists. Upside risks include prolonged escalation of conflict in the Middle East and a shortfall in US shale oil production, the World Bank notes.

Gas Prices

Natural gas prices in the US are projected to rise sharply in 2025-26 as new liquefied natural gas (LNG) terminals expand export capacity, increasing competition for domestic supplies.

European gas prices are expected to rise by 11% in 2025, reflecting strong global demand for LNG and reduced supplies, before falling by 8% in 2026 as more LNG supplies come in. Upside risks include conflict events that reduce gas exports from the Middle East and uncertainties surrounding LNG supplies from the Russian Federation to Europe, particularly given the recent decline in LNG volumes supplied to the European Union.

On the other hand, weaker-than-expected demand growth in rapidly growing markets in East Asia and the Pacific region and South Asia could lead to lower prices, the World Bank points out.

Prices in 2022-2026

It is worth noting that global oil prices decreased by about 4% in 2024 to $74.5 per barrel. In January 2025, prices rose to $82 following extensive US sanctions against Russia.