Adnan Adams Mohammed
The world market price of crude oil is forecasted to fall to about US$64 a barrel this year as against US$80.7 per barrel in 2024, the World Bank in its Commodity Markets Outlook report has indicated.
The World Bank further cautioned that other commodity prices are set to fall sharply this year, by about 12% as it attributes this development to weakening global economic growth.
This could have some implications for Ghana government’s projected revenue from the export of oil and gold in the 2025 budget. In the 2025 budget, the government is projecting over US$1 billion in revenue from crude oil exports, based on a benchmark price of US$74 per barrel.
According to the World Bank, oil prices are also expected to exert substantial downward pressure on the total commodity index in 2025, as a marked slowdown in global oil consumption coincides with expanding supply.
It said the anticipated commodity price softening will be broad-based, however, with more than half of the commodities in the forecast set to decrease this year, many by more than 10%.
The situation the Bretton Woods institution warned could have a knock-on consequences for economic activity and inflation for developing countries like Ghana.
The report also pointed out that there are important upside risks to commodity prices—for instance, if geopolitical tensions worsen, threatening oil and gas supplies, or if extreme weather events lead to agricultural and energy price spikes.
All things being equal, coupled with a stable foreign exchange market, the price of petroleum products will be flat at the pumps.
The report stated that escalating concerns about global economic growth saw oil prices fall sharply in early April 2025 to below US$63 per barrel, the lowest level since April 2021.
The price slump started with the announcement of large trade tariffs on April 2, 2025, by the United States. This was associated with a US$12 per barrel decrease in the course of four trading days, the 11th-worst four-trading-day price performance since 1990.
Although the Brent crude price had declined to US$70 per barrel by early March 2025, the net impact of these different factors resulted in a small increase of $1/bbl in quarter one 2025, partially reversing a $5/bbl quarter-on-quarter decrease in the final quarter of 2024.
Meanwhile, global oil demand increased by1.2% in the first quarter of 2025 compared with 1.1% in quarter 4, 2024.
Oil demand in China edged up by 0.2 mb/d (1.4%) in first quarter 2025 from 1.0% in 4th quarter of 2024, with demand in advanced economies also picking up by 0.4 mb/d (0.9%), from 0.3%.
Over the course of 2024, oil consumption growth slowed in China, Europe and Central Asia , and Latin America and the Caribbean, but accelerated in East Asia and the Pacific excluding China, the Middle East and North Africa, and South Asia.
Consumption fell in Sub-Saharan Africa, while it was flat in advanced economies.
The deceleration of China’s oil demand in 2024 was due in part to increasing penetration of electric vehicles (EVs). More than 40% of new cars purchased in China in 2024 are estimated to be EVs, with a resulting oil demand reduction of about 0.45 mb/d.
