In global oil markets, to paraphrase an ancient Greek philosopher, the only constant is change. To keep oil prices stable, proactive strategies are the name of the game, energy industry observers said on March 19 at CERAWeek by S&P Global.

Oil markets have stayed relatively stable despite sway from uncertainties stemming from geopolitical conflicts, foreign policies and elections, Helen Currie, chief economist at ConocoPhillips, said during a panel discussing the future of oil markets through 2025.

Brent crude ended March 19 at $86.23/bbl, said James Burkhard, moderator, vice president and head of research for oil markets, energy and mobility at S&P Global. At CERAWeek last year, for the week of March 6, 2023, the Brent spot price averaged $82.86/bbl, according to U.S. Energy Information Administration data.

But volatility remains. In 2022, oil prices averaged $101/bbl, then dropped to an average $83/bbl last year, according to the EIA.

Economics is also always at play.

“This time last year, there was a lot of consensus that the U.S. was going to have a recession,” Currie said. “In my opinion, we’ve not had that… without having a full-blown recession, oil demand has stayed very strong both in the U.S. and in other countries—both developed countries and emerging markets.”

But while the industry is much more “upbeat” than last year at CERAWeek, it is still “far from out of the woods,” Ben Luckock, global head of oil for Trafigura, said.

The question remains whether prices can remain stable in an industry notorious for unpredictable cycles.

The Russia-Ukraine war and conflict in Gaza have put stress on supply chains, and the effects of increased oil shipping risks in the Red Sea will start to be seen in the coming year, Currie said.

The 2024 elections in the U.S. and other parts of the world may also have an effect on markets and present a challenge in predicting where they end up next year, said Frederic Lasserre, global head of research and analysis for Gunvor Group.

Panelist Mazuin Ismail, senior vice president of downstream business at Petronas, said geopolitics and other unpredictable events will continue to affect oil markets. It’s the energy industry’s job to avoid taking a passive stance, Ismail said. Continued investment and policy response will allow the energy industry to ride the waves of political instability.

In the U.S., the move to add other forms of energy to the energy mix—beyond shale oil and gas—allows for peace of mind, despite an election year that could potentially upend who is in control of Washington. “It certainly matters to the population, but are we on edge about it? Not particularly—we’ll take what comes,” Luckock said.

For energy security, “diversity, adaptability—that’s key,” Ismail said. Countries are realizing the importance of fuel diversity. And predictable policies allow for new investments without concern over who will hold political office.

With stable and predictable policy, investments that require years of planning can happen without the worry of rules changing suddenly, Ismail said.

U.S. oil production is still at a record high and will continue to play a critical role in the global energy mix for the medium to long term.

The market also sees clear signals that sectoral and geographical demand are not going away. If oil doesn’t flow to vehicles for transport, it can flow as feedstocks for chemical products. And as populations continue to grow, demand for hydrocarbons will grow as well.

“When we say that we are going to supply oil to every corner in the world, it cannot be abundant in certain corners of the world and scarce at the other end of the world,” Luckock said. “So the question is, if we want to fuel, for example growth areas — Asia for example — how do we make sure that it's equal to all communities so that the economics churn a lot better?”

The world is not going to swing from oil to renewables completely, Ismail said. To meet demand and because the market now has fuel diversity, it is important to invest in decarbonization as well as upstream. Proceeds from oil can be used to invest in cleaner fuels, he said.

“How do we complement oil with gas, with renewables? Because at the end of the day, that stack of fuel is essentially important for everyone,” Ismail said.

Looking ahead to 2025, the uncertainties of the oil market are unavoidable. But diverse investments and staying adaptable can keep prices afloat.

The energy outlook is “very different to what we had last year, but it does serve to show how difficult it is to predict 12 months forward. We'll be sitting up here in 12 months, and I guarantee you we get it wrong,” Luckcock said.