The return of Donald Trump to the political spotlight has introduced new uncertainties into global energy markets, making it more challenging to forecast oil and gas prices through 2030, according to the latest Fundamental Edge report by Enverus Intelligence Research (EIR), a subsidiary of energy analytics firm Enverus.
The report sheds light on key drivers of global oil and gas prices, supply-demand dynamics, and market volatility, outlining a complex and evolving landscape for the industry.
According to Al Salazar, director at EIR and author of the report, oil markets are currently characterized by strong fundamentals, with global demand reaching historic highs and crude and product stockpiles at alarmingly low levels.
“Fourth-quarter oil balances are in a deficit. Global oil demand is at record levels, and crude and product stocks are low.
“Fundamentals alone suggest oil prices should be in the mid-to-high $80s.”
Al Salazar, director at EIR
Despite these fundamentals, Brent crude prices have exhibited volatility, often reacting to geopolitical developments rather than adhering to market basics.
Salazar highlighted that the U.S. Strategic Petroleum Reserve (SPR) remains half-empty, a factor that should theoretically push prices higher. However, he observed a contradiction in market behavior, where geopolitical risk premiums have failed to sustain higher price levels.
The report underscores that Trump’s proposed policies, including import tariffs and heightened global trade uncertainty, add significant complexity to the outlook.
China’s trade-centric economy, which has been a key driver of global oil demand, could face headwinds under these conditions. This has led EIR to revise its 2025 Brent crude price forecast downward by $5 per barrel due to conservative expectations regarding Chinese oil consumption.
“President-elect Trump’s proposed import tariffs and increased global trade uncertainty complicate Beijing’s task of steering China’s trade-centric economy,” Salazar explained.
China’s economic activity and its role as a major importer of crude oil remain pivotal to global oil balances. If Beijing struggles to navigate the challenges posed by U.S. policies, it could dampen growth in oil demand and weigh on prices.
Additionally, elevated geopolitical tensions, including Russia’s ongoing conflict with Ukraine and tensions in the Middle East, further cloud the market’s trajectory.
Natural Gas Markets: Volatility on the Horizon
The report also highlighted significant developments in the natural gas sector. After a period of hyper price elasticity in the short term, this trend appears to be waning.
The flexibility of producers to shut in or ramp up production based on price swings is nearing its limits, indicating that new supply will soon be necessary.
“The short-term hyper price elasticity of supply that has been present for the past year has started to break, suggesting the amount of highly price-elastic shut-in production is on its last legs.”
Al Salazar, director at EIR
Salazar added, “New supply will be needed soon, as activity levels remain alarmingly low.” This shift could lead to increased volatility in Henry Hub natural gas prices, especially in the first half of 2025.
EIR anticipates upward pressure on prices, reflecting a tightening supply-demand balance. With gas production potentially constrained and demand resilient, market participants should prepare for heightened fluctuations.
Another complicating factor is the state of the U.S. Strategic Petroleum Reserve, which has been partially depleted following releases aimed at stabilizing domestic fuel prices.
The SPR’s half-empty status reduces the government’s ability to respond to supply shocks, further amplifying market uncertainties.
This situation becomes more pronounced under Trump’s potential presidency, given his past emphasis on “America First” energy policies, which included promoting domestic production and reducing reliance on foreign oil.
While these policies may boost U.S. output, they could also disrupt global trade flows and exacerbate price volatility.
In the years leading up to 2030, oil and gas forecasting will require a delicate balance of economic analysis, geopolitical awareness, and strategic adaptability.
As Enverus’ report suggested, the energy landscape is far from stable, and stakeholders must prepare for both opportunities and challenges ahead.
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