The global oil market has recently experienced a significant turning point with the price of a barrel of oil falling below the USD 70 mark. This development marks a pivotal moment for industry players, governments and consumers.

Historic decline in the barrel of oil

In recent years, the price of oil has experienced significant fluctuations. In 2022, the barrel of Brent, the market benchmark, had reached historic highs, exceeding USD 120 due to political tensions.

However, in March 2025, the price fell below USD 70, reaching levels not seen in several years. This decline represents a decrease of nearly 40% compared to the previous year’s prices at the same time.

Drivers of the Decline

Several factors explain this fall in prices.

• Increased Production: OPEC+ countries have increased their production to meet growing global demand. In January 2025, OPEC production reached 29.5 million barrels per day, a record level since 2020.
• Reduced Demand: Global oil demand has been affected by economic factors, including persistent inflation and high interest rates.
• Energy Transition: The transition to renewable energy sources has also played a role. Many countries are investing heavily in renewable energy, reducing their dependence on oil. In 2024, investments in renewable energy reached a record 500 billion USD.
• Technology and Efficiency: Technological advances in oil extraction and refining have allowed producers to reduce their costs. New extraction techniques, such as horizontal drilling and hydraulic fracturing, have made oil extraction less expensive and more efficient.

Trump’s pressure on producing countries

Donald Trump’s pressure has undoubtedly accelerated things. At the end of January, during the Davos Forum, the American President insisted on producing countries to produce more to lower prices.

An urgent question for the President of the United States, because low oil: « it’s good for American consumers, for industry and generally for the American economy ». The message has been received: the eight oil-producing countries have committed to no longer change their schedule and to increase their production from April 1st.

Economic Implications

The fall in oil prices has profound implications for the global economy. Here are some of the most notable consequences.

• Impact on producing countries: Countries whose economies depend heavily on oil revenues, such as Saudi Arabia and Russia, could face economic challenges. In 2024, the Saudi budget forecast an oil price of USD 80 per barrel to balance its accounts. With prices below this threshold, fiscal adjustments will be necessary.
• Consumers and inflation: For consumers, lower oil prices could mean lower transportation and energy costs. This could contribute to lower inflation in many countries. Pump prices are projected to fall by 10-15% by the end of 2025.
• Investments in renewable energy: Lower oil prices could also spur investments in renewable energy. Companies could be encouraged to diversify their energy sources to prepare for a future where oil may become less profitable.

What to expect in the near future?

As the price of a barrel of oil stabilizes below the USD 70 mark, several scenarios can emerge for the future.

• Price Stability: If OPEC+ production remains high and global demand does not rebound, prices could stabilize around this level. This could create a new equilibrium in the oil market.
• Persistent Volatility: Tensions, such as those between the United States and Iran, could cause unpredictable price swings. Oil markets are often sensitive to global events, and an escalation of conflict could send prices soaring rapidly.
• Accelerating Energy Transition: In the long term, the transition to renewable energy could accelerate. Governments and companies could step up efforts to reduce their dependence on oil, which could have a lasting impact on demand.

A Major Turning Point for the Global Market

The fall in the price of oil below 70 USD per barrel represents a major turning point for the global market. Economic, technological, and environmental factors all play a role in this dynamic. As producing countries and consumers adjust to this new reality, it is essential to monitor market developments and their implications for the global economy.

The energy transition, while encouraging, could also pose long-term challenges for the oil industry. In any case, the oil market will continue to evolve, and it will be fascinating to see how it adapts to the changes ahead.