Oil prices, after a period of active growth, have began showing a downward trend today. According to trading data, the price of Brent crude August futures initially rose to $77.47 per barrel, then dropped to $76.33 per barrel. WTI declined to $74.74 per barrel.
The price of one barrel of Azerbaijani Azeri Light crude oil on an FOB basis at the Turkish port of Ceyhan increased by $3.79, or 5.09%, reaching $78.25. In Azerbaijan’s state budget for this year, the oil price is set at $70 per barrel. For reference, the lowest recorded price for Azeri Light was on April 21, 2020, at $15.81 per barrel, while the highest was in July 2008, at $149.66 per barrel.
Oxford has developed three scenarios for developments in the oil markets.
The first scenario envisioned a de-escalation accompanied by the imposition of strict sanctions against Iran, which would lead to a reduction in Iranian oil production by approximately 700,000 barrels per day. This would result in Brent crude prices rising to $75 per barrel, which is $6 above the baseline scenario.
In this scenario, the impact on global growth is expected to be minimal — only 0.1 percentage points —keeping it at 2.4% for both this year and the next. Inflation, meanwhile, is projected to rise slightly by 0.2 percentage points in 2026 and is not expected to affect central bank interest rates.
The second scenario envisions a complete halt in Iranian oil production, resulting in a loss of 3.4 million barrels per day. In this case, Brent crude would reach $90 per barrel and remain at that level through the end of 2026. Global inflation would rise from 3.5% to a peak of 4.5% by late 2025 and early 2026. In the United States, inflation would reach 4.5%, while in the Eurozone it would stand at 2.6%.
In this scenario, global growth would decline to 2.3%, while the U.S. economy would contract by approximately 0.2% due to its status as a major oil producer.
In the third scenario included in Oxford Economics’ analysis, it is expected that Iran will close the Strait of Hormuz, disrupting oil exports from the Persian Gulf countries. Brent crude prices would then surge to $130 per barrel before partially declining once the strait reopens. Global and U.S. inflation would reach 6%, while inflation in the Eurozone would hit 3.7%.
In this scenario, the institute estimates that global growth will decline to 2.3% in 2025 and 2.2% in 2026, which is 0.3 percentage points below the baseline forecast. At this time, interest rate cuts will be postponed due to rising inflation, with the possibility of sharper reductions in 2026 if underlying inflationary pressures ease.
The analysis concluded that even in extreme scenarios, the impact of price shocks on global economic growth remains relatively limited. Inflationary risks are the key factor influencing central bank decisions, and the U.S. economy is more resilient than that of the Eurozone.
