Brent Crude: The Good, The Bad and The Ugly.
David Sheret
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In the past five years, Brent crude has often served as a litmus test for global disorder — a price reflecting not only demand and supply fundamentals, but also the strategic calculations of nation states navigating post-pandemic recovery, energy transition imperatives, and a shifting security architecture.
What began as a COVID-induced collapse has evolved into something broader: a competition between systems, strategies and timeframes. In the oil market — as in the wider geopolitical arena — we are witnessing a modern standoff, one reminiscent of the closing scene of The Good, the Bad and the Ugly: three powers staring at one another with mistrust, calculation, and a shared sense that timing is everything.
At its centre stands the United States — moving with a speed and assertiveness not seen in decades. Washington is taking fast-tracked executive decisions on everything from energy subsidies and sanctions to strategic production guidance and tariff alignments. These moves, often taken without multilateral consultation, have had wide-reaching implications, shifting the equilibrium between domestic energy security and global market stability.
To one side is China, the world’s largest importer of crude, now strategically stockpiling barrels amid economic uncertainty. To the other, OPEC+, led by Saudi Arabia and Russia, recalibrating output with a growing focus on market share, even if that means lower prices in the short term. Each is playing a long game — but their clocks don't appear to be too synchronised.
Recent historical data is there to be seen. In early 2020, Brent fell from over $65 to below $20 within three months. WTI briefly entered negative territory. OPEC+ responded with a record 10 million barrels per day (bpd) output cut. As lockdowns eased, demand returned — and with it, price. By 2021, Brent averaged $71. In early 2022, with global supply lines already strained, Russia’s invasion of Ukraine sent Brent to nearly $139 — its highest in 14 years. Trade flows were reordered. Energy security re-entered mainstream economic policy.
Through 2023, Brent held between $70 and $90. Central banks tightened policy to curb inflation. China's recovery faltered. OPEC+ kept production in check. But by 2024, the balance shifted. Although prices briefly surged above $90, they have since trended downward. In May 2025, Brent trades near $65 — roughly 22% below its level a year ago.
Three structural forces are now reshaping the market IMHO:
1. Inventories are rising. According to the International Energy Agency (IEA), global oil stocks reached 7.7 billion barrels in March 2025 — the highest in over two years. Floating storage is also expanding, a sign that supply is outpacing immediate demand. China’s record onshore reserves are likely opportunistic, but the global trend is one of surplus.
2. OPEC+ is playing a strategic game. The group’s recent decision to increase output appears motivated not only by fundamentals but also by competition. Sources close to the bloc are reported to suggest a deliberate attempt to lower Brent below $60 — enough to challenge the breakeven economics of US shale producers. Unlike previous efforts in 2014–16, this approach coincides with cost pressures, depleted acreage, and capital discipline among some US operators.
3. The energy transition continues, but not linearly. The IEA projects global oil demand growth slowing to just 0.7 million bpd in 2025. Structural factors — from EV adoption to improved fuel efficiency — are reducing the elasticity of demand. Yet infrastructure bottlenecks, critical mineral constraints, and political fragmentation continue to delay the full realisation of decarbonisation targets. The transition is no longer just about ambition — it is about execution.
Overlaying these dynamics is a fourth and emerging factor: a more assertive and unilateral United States. As mentioned above, in recent months, Washington has shown a growing willingness to make strategic decisions with global impact — whether through direct support for domestic LNG projects, adjustments to SPR release policy, or sanctions recalibrations. These decisions are often made with speed and conviction, reflecting both domestic political pressure and a broader aim of geopolitical positioning. This is not merely about energy — it is about economic influence, defence alignment, and regional stability; setting aside matters of individual ambition or national posturing for a moment.
Against this backdrop, other major economies are acting with similar caution. China is recalibrating its energy and manufacturing footprint. Europe, exposed and divided, is pursuing diversification while managing cost inflation. Meanwhile, Russia and Saudi Arabia maintain alignment but under different economic constraints. Brazil and Guyana—emerging as influential producers—watch the landscape with intent, balancing new export capacity against price volatility. India, now the world’s primary demand engine, faces the challenge of matching massive consumption with supply and pricing risks.
Increasing geopolitical tension compounds the picture. As of 2024, there are approximately sixty major ongoing armed conflicts worldwide—the highest number since the Second World War—driven by everything from interstate wars to civil unrest and proxy battles. Against such a backdrop, the global energy system is defined by asymmetric interdependence—each actor calibrated by how they weigh the strategic value of oil against the cost of instability.
Key Points:
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About the Author: David Sheret is CEO of Sheret Energy Offshore and a recognised authority on global energy markets, offshore strategy, and the evolving dynamics of the energy transition. He was co-founder of Archer Knight, a leading energy market intelligence and advisory firm, and formerly served as an executive board member of Subsea UK, now the Global Underwater Hub. With over two decades of experience advising operators, investors and governments, David brings a unique blend of commercial, technical and geopolitical insight to some of the most complex challenges in the offshore and energy sectors.
You can contact him at david@sheret.net