The recent increase in VAT and excise duties announced by the Bolojan government will make the fuels more expensive in Romania. But the Romanian government might be helped to keep the prices in check by the current downward pressure on the global oil prices, writes eToro analyst for Romania, Bogdan Maioreanu.
In the second half of 2025, the primary driver shaping these is the substantial increase in global supply coupled with modest demand growth.
OPEC+ has pledged to accelerate its production schedule, with eight member countries (Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman) implementing a 411,000 barrel per day increase in July, larger than originally planned.
And according to Reuters, this increase will continue in August too. This represents the continuation of a gradual reversal of the 2.2 million barrel per day voluntary cuts that began in April 2025, with the alliance maintaining flexibility to pause or reverse increases based on market conditions.
Non-OPEC+ producers are simultaneously ramping up output, led by the United States, Brazil, and Canada. According to an International Energy Agency (IEA) report, in the absence of a major disruption, oil markets in 2025 look well supplied. World oil demand is forecast to increase by 720.000 barrels per day, while global oil supply is projected to rise by 1.8 million barrels per day this year. The US Energy Information Administration (EIA) forecasts that global oil inventories will build by an average of 0.8 million barrels per day in 2025, 0.4 million barrels per day higher than previously expected.
Oil demand growth continues to decelerate across the major consuming regions. The IEA has revised its 2025 global demand forecast lower, primarily due to weaker consumption in the United States and China. For the markets, China’s oil demand is particularly concerning, with the IEA projecting that Chinese consumption will peak at 16.9 million barrels per day by 2027, two years earlier than previously anticipated. This acceleration in China’s demand peak reflects the extraordinary growth in electric vehicle sales and the broader energy transition underway in the world’s second-largest economy.
Economic headwinds are also constraining global oil consumption. The US EIA projects world GDP growth of just 2.8% in 2025 and 2026, the lowest rates since 2008, excluding recession years. Trade tensions and tariff uncertainties have already begun impacting global commerce, with preliminary data showing reduced container vessel departures. This economic slowdown directly translates to reduced oil consumption, as economic activity drives energy demand through increased mobility, shipping, and industrial output.
While Middle East tensions continue to inject periodic volatility into oil markets, the geopolitical risk premium remains modest. Recent conflicts initially drove Brent crude above $80 per barrel, but prices quickly retreated to the mid-$60s following ceasefire declarations. The market’s muted response to geopolitical flashpoints reflects the current abundance of spare production capacity within OPEC+ and elevated global inventory levels.
For the second half of 2025, fundamental supply-demand dynamics point toward continued downward pressure on oil prices. The EIA expects Brent crude to average $66 per barrel for the full year 2025, with prices potentially declining to $59 per barrel in 2026. JP Morgan maintains an even more bearish outlook, forecasting Brent at $66 per barrel in 2025 and $58 per barrel in 2026. Oil markets are likely to remain oversupplied, with prices facing structural headwinds from abundant supply growth, modest demand expansion, and the accelerating energy transition in key consuming countries. While geopolitical events may continue to provide temporary price spikes, the underlying fundamentals suggest a challenging environment for sustained oil price recovery through the remainder of the year.
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