Following President Donald Trump's impending return to the White House, oil market participants are eagerly anticipating what lies ahead.
The US political system is at a tipping point, with Donald Trump’s second term poised to either bring substantial shifts in US policy or reinforce continuity – both alternatives carrying far-reaching implications for global oil markets in 2025.

Regardless of geopolitical uncertainties and the recent election outcome, persistent trends in oil markets are likely to shape the outlook ahead.
Rystad Energy analyzes the three key trends defining the structural shifts in oil fundamentals.

OPEC+ still pulls the strings

OPEC+ is likely to continue adjusting market management by directly influencing crude supply and indirectly managing product supply.
The downstream sector in the Middle East is growing, with considerable refining capacity added in recent years.
OPEC countries can be broadly divided into two groups: those consistently under-compliance in crude production cuts; and those showing higher compliance on the crude side while exporting large volumes of refined products.

In other words, in equivalent crude terms, more oil is reaching the market than required.
This balance between crude and product flows has helped keep prices from reaching extreme highs or lows, aligning with OPEC's goal of maintaining price stability.

OPEC+'s main strategy seems to be keeping the crude market in a backwardation structure, where prompt prices are higher than futures.
This market structure allows OPEC+ to manage financial market dynamics and limit producer hedging, giving the group more control over market direction.
OPEC+ is likely to continue this approach, ensuring that prompt crude prices stay above futures.

The policy of signaling that more crude will come onto the market further down the curve helps maintain pressure on the back end, supporting the backwardation structure.
OPEC+ is not overly concerned about non-OPEC growth, as US shale production has slowed and growth is now lower than historical levels.
Additionally, the quality of US shale oil is becoming lighter, which presents challenges for refineries in both the US and Europe, particularly as the petrochemical market faces weaker demand. Canada’s crude reaching Asian markets could further limit the US refining advantage.

Brazil is also increasing its oil production, but it is important to note that Brazil is not yet participating in OPEC+ production cuts and no indications have been given that it will.
However, in the event of a significant market downturn, it is possible that Saudi-led OPEC+ could ask Brazil to join the cuts, as Brazil is a member of the BRICS group.

Overall, OPEC+ is in a strong position, controlling the right quality of crude and holding important downstream assets in the Middle East, with stakes in Asian markets, particularly China.
The stability OPEC+ has maintained, even in a geopolitically challenging year, is notable.

Refinery margins battle weaker demand and higher supply

Refinery margins surged to very high levels following the Ukraine crisis, providing refineries with a strong incentive to stay operational and slowing the rate of attrition.
Middle Eastern refineries, in particular, have been the biggest beneficiaries of increased European product demand, as European refineries lost access to cheaper Russian crude and gas.

However, the strong product exports from the Middle East and Asia to Europe have put downward pressure on refinery margins, driving them back to low levels, near pre-pandemic levels. This has contributed to further refinery closures across the US, Europe and China.

This could be a critical tipping point for OPEC+, which is likely to continue keeping refinery margins under pressure throughout 2025, driving further consolidation in the refining sector.
As demand recovers—possibly boosted by Chinese stimulus measures and broader economic normalization—OPEC+ and China are positioned to capture a larger share of the product markets.
By 2025, the management of product markets could become just as important as the management of crude markets.
The idea of OPEC effectively managing the ‘products’ market is not out of the question.

Oil trade flows continue to battle inefficiencies

The third of the key trends is that trade flows are likely to stay impacted, with inefficiencies hampering an easier balancing of supply and demand tensions.
The supply and demand for oil has certainly remained impacted by a weaker macro-economic post-Covid recovery.
Geopolitical conflicts have significantly altered trade flow volumes and routes towards higher costs and ineffective balancing of stress in supply and demand balances.
Longer routes in a backwardated marked with high interest rates has further eroded market balancing across regions.

The big shifts through the year have been the routing of Russian crude and product flows towards Asia, routing of crude and products via the southern tip of Africa due to disturbances in the Red Sea, altered flows through the Strait of Hormuz and longer flows from Russian products heading to South American countries.

These changes are unlikely to resolve easily as the duration of disruptions has been lengthy and supply chains have become entrenched with new market players in the trading segment.