Oil prices are expected to average nearly $100 per barrel over the next 12 months as demand destruction will remain the primary driver of market balance amid the worst oil supply shock in history. Over 40% of asset managers believe demand destruction will be the most significant factor in addressing supply disruptions, while 13% of respondents attributed OPEC+ policy responses and spare capacity to offset losses. However, only 12% of participants expect the risk premium to exceed $20 per barrel. Market sentiment remains cautious, with traders cautioning against overreliance on recent U.S. President Donald Trump’s comments about Iran negotiations, which have fueled headlines but left many uncertain about their long-term impact. Analysts note that such volatility often reflects heightened geopolitical tensions, with participants redefining risk premiums based on evolving international dynamics. This situation underscores a growing trend of market sensitivity to ongoing geopolitical events, signaling a shift toward more resilient pricing strategies as global uncertainty intensifies.
