Global crude oil tracked by Brent futures has fallen sharply, losing over 7% in August and extending its year-to-date decline to more than 11% in 2025.
The commodity, which opened the month above $71.83 per barrel, is now hovering around $66.09 following a new forecast from the U.S. Energy Information Administration (EIA) on Tuesday.
The EIA predicts that Brent crude spot prices could average below $60 per barrel in the fourth quarter, a level not seen since 2020.
“There’s a lot of uncertainty in the petroleum market,” said EIA Acting Administrator Steve Nally. “We’ve seen significant drops in oil prices when inventories build quickly, which is what we anticipate in the coming months.”
Reports also indicate that U.S. crude production could reach a record 13.41 million barrels per day in 2025, driven by gains in well productivity. Analysts warn that rising supply may continue to overshadow demand.
For now, Brent, currently around $66 per barrel, is holding above the $60 support level, but a break below it could trigger further selling pressure.
Crude oil started the year at $74.93 per barrel, soaring to $82.03 on January 15, the highest price recorded so far in 2025, before entering a downward trend.
Tariffs contributed to a decline from February through early March, pushing prices below $71 per barrel.
A brief recovery in late March into early April lifted the commodity back to $74, but it plummeted again for the rest of April, hitting a low of $61.04 to close the month.
Prices began to recover in May and remained relatively firm through June, as geopolitical tensions and concerns over potential disruptions from Iran pushed prices higher, a surge that extended into July, reaching $71.77.
Analysts suggest that forecasts of supply likely surpassing demand in early August may be contributing to the recent selloff, resulting in a drop of over 7%.
If crude oil continues to fall as the EIA predicts, currencies linked to global oil movements could also experience increased volatility, except interventions from central banks occur.
The naira remained relatively steady against the dollar in the first half of 2025, despite sharp swings in global oil prices.
In January, the naira traded around N1,537/$ but strengthened to about N1,480/$ by month’s end, supported by Brent crude rising to $76 per barrel, with Nigerian oil blends trading even higher.
From February to April, the naira gradually weakened, falling to N1,596/$ by the end of April.
As oil prices fell, the naira weakened in response.
As oil prices fell, the naira weakened in response.
From May through June, the trend reversed. Oil prices climbed above $66 per barrel, with Nigerian grades trading above $70.
Analysts noted that the recovery was supported not only by higher oil prices but also by Central Bank dollar sales, which helped stabilize the currency during March and April.
As of August 13, 2025, the naira is trading at N1,533 per dollar, comfortably below the N1,600 mark.