Geopolitics Changes Brent’s Trajectory. Forecast as of 24.10.2025
Nothing seemed capable of halting Brent’s slide as the oil market headed toward a record surplus of 4 million barrels a day by 2026. However, fresh US sanctions on Russia reshaped the market landscape. Let’s discuss this topic and make a trading plan.
The article covers the following subjects:
Major Takeaways
- The US has gained favorable timing for sanctions.
- India refuses to purchase Russian oil.
- The future of oil depends on China.
- Consider buying Brent with targets at $69 and $71.3.
Weekly Fundamental Forecast for Brent
Timing is everything in geopolitics and in the oil market. Donald Trump’s sanctions on Russia’s top producers, Lukoil and Rosneft, hit at the heart of Moscow’s energy industry just as the market was bracing for a record surplus.
With oil at $85–$90 a barrel, sanctioning Russia would have been too risky for Donald Trump. Such a step could have driven Brent prices to $120–$140, reigniting US inflation, forcing the Fed to tighten monetary policy, and potentially slowing economic growth. But with prices hovering near $55–$60 and the International Energy Agency forecasting a surplus of 4 million barrels a day for 2026, the timing looked far more favorable.
Russian Oil Supplies to India
Source: Bloomberg.
Lukoil and Rosneft were not chosen by chance. These companies account for almost half of Russia’s crude exports, which is about 2.2 million barrels a day. Including Surgutneftegaz and Gazprom Neft, which were sanctioned earlier, the total rises to roughly 70% of exports, or 3.1 million barrels a day. Lukoil and Rosneft had been India’s main suppliers of Russian oil. Thus, New Delhi is now looking for alternatives.
India will most likely turn to the Middle East. Kuwait has already stated that OPEC+ stands ready to offset any market shortfalls by boosting production. The question is whether anyone will match Moscow’s discounts.
Discounts on Russian Oil Compared to International Benchmarks
Source: Bloomberg.
Although the oil market has been rattled, it remains resilient. Brent’s daily and weekly gains were the biggest since the Israeli-Iranian conflict erupted in June. The market structure has shifted from contango to backwardation, meaning it is more profitable to sell oil immediately than to store it.
Russia, however, has long experience in evading Western sanctions. Much will now depend on China’s stance, as about 17% of its oil imports in 2025 came from Moscow, and those volumes have been steadily increasing.
Donald Trump’s meeting with Xi Jinping may become pivotal for the oil market. The US and China remain at odds over rare earths, soybeans, technology, and broader trade issues. Even so, the two countries managed to reach an agreement relatively quickly last spring.
Weekly Trading Plan for Brent
If Donald Trump manages to weaken ties between Russia and China, Brent’s rally will likely extend further. The long trades initiated at $59.3 proved profitable. Consider holding them open or adding new positions with targets at $69 and $71.3. However, if Trump fails to make progress in relations with China, it may be time to lock in profits.
This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.
Price chart of UKBRENT in real time mode
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance broker. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2014/65/EU.
According to copyright law, this article is considered intellectual property, which includes a prohibition on copying and distributing it without consent.
