Global oil markets remain on an uncertain footing as rising geopolitical tensions and resilient supply chains continue to offset risk-driven price surges, according to the July 2025 Commodity Market Update from the African Export-Import Bank (Afreximbank).
Brent crude hovered around US$81 per barrel in June, buoyed by a 12-day Iran-Israel conflict and U.S. strikes on Iranian nuclear sites. Still, despite those shocks, Afreximbank notes that prices are up just 10% since mid-June and remain well below the US$116 highs seen in March 2022.
“Persistent oversupply, particularly from non-OPEC producers and unexpectedly strong Russian exports, has kept the market broadly balanced, despite repeated shocks,” the report states.
OPEC+ Output Rises, Surplus Grows
Afreximbank notes that OPEC+ countries, including Algeria, Iraq, Saudi Arabia, and Russia, are gradually unwinding earlier production cuts. In July 2025, the group added 411,000 barrels per day (bpd) to global supply, part of a phased rollback of 2.2 million bpd in voluntary cuts agreed in late 2023. So far, 1.4 million bpd has already returned to market.
Despite concerns about oversupply, actual output gains may be tempered. According to the U.S. Energy Information Administration (EIA), several producers are already pumping above official targets or face capacity constraints. Meanwhile, stricter sanctions on Russia, Venezuela, and Iran may cap further increases.
The EIA projects global supply to rise by 1.6 million bpd in 2025, reaching 104.6 million bpd, with an additional 970,000 bpd expected in 2026.
Diverging Demand Forecasts: EIA vs. OPEC
The report also highlights growing uncertainty around global demand forecasts. The EIA expects slowing demand growth, citing economic headwinds and electric vehicle adoption. It forecasts global oil consumption to grow by 740,000 bpd in 2025, compared to OPEC’s more optimistic estimate of 1.3 million bpd.
OPEC expects strong demand from Asia, the Middle East, and Latin America, citing increased industrial activity and petrochemical expansion. Seasonal factors, such as power needs during the Arab summer and religious travel, are also expected to support demand in the near term.
Africa’s Strategic Position in Global Oil Trade
African producers are playing an increasingly strategic role in global crude flows. Nigeria’s crude exports to the U.S. reached a six-year high in May at 364,000 bpd, largely due to a temporary shutdown at the Dangote refinery. This unplanned maintenance diverted domestic supply to export markets.
At the same time, West African shipments rose 9% month-on-month in May to 3.56 million bpd, according to Bloomberg tracking. While exports to Western markets increased, shipments to Asia declined, likely displaced by discounted Russian crude.
Nigeria’s paradox is clear: while exports surge, the Dangote refinery is importing U.S. crude to supplement its expanded processing needs. It is expected to receive 5 million barrels of WTI crude in July, sourced through trading firms Vitol, Socar, and Glencore.
Infrastructure Gaps and Policy Constraints
Despite its vast reserves, Africa’s oil sector faces persistent bottlenecks. Much of the region’s pipeline infrastructure dates to the 1970s and 1980s, limiting efficiency and increasing costs. In Nigeria, daily production losses of up to 400,000 bpd persist, even as refineries struggle to match upstream capacity with refined output.
The report stresses that Africa’s limited intra-regional energy networks are holding back efforts to integrate the continent’s hydrocarbon trade under frameworks like the African Continental Free Trade Area (AfCFTA).
Afreximbank’s Expanding Role in Oil Finance
To address these gaps, Afreximbank is scaling up its oil infrastructure financing across the continent. The Bank has backed several key developments, including:
- Dangote Refinery (Nigeria) – Africa’s largest at 650,000 bpd
- Port Harcourt Refinery refurbishment (Nigeria) – 210,000 bpd
- Lobito and Cabinda refineries (Angola) – combined 260,000 bpd
- New Côte d’Ivoire refinery (SIR) – over US$6.5 billion in planned investments
In East Africa, Uganda has seen nearly US$7 billion in oil sector investment tied to the Tilenga, Kingfisher, and EACOP pipeline projects, set to deliver first oil in 2026. These developments aim to align upstream production with downstream capacity and export infrastructure.
Market Outlook: Rangebound Prices Despite Risks
Looking ahead, the report projects that oil markets will remain finely balanced. Despite ongoing geopolitical risks, especially in the Middle East, fundamentals suggest a bearish tilt. The EIA expects supply to outpace demand through 2026, leading to continued inventory builds.
Brent crude is forecast to trade in the US$65–85/bbl range through 2026, assuming relative stability in the Iran-Israel conflict and modest OPEC+ supply increases. However, tightening capital discipline among U.S. shale producers and seasonal demand surges in Asia and the Middle East could offer temporary price support.
The Afreximbank report paints a picture of a global oil market navigating structural imbalances, competing forecasts, and regional disparities. For African producers, the path forward lies in upgrading infrastructure, diversifying crude outlets, and scaling local refining capacity, all while positioning for a more integrated, resilient role in global energy trade.
