Global energy markets are experiencing unprecedented turbulence in 2025, with geopolitical tensions and tariff policies now identified as the primary drivers of Brent crude oil volatility. According to analyses from Deutsche Bank and ING, traditional supply and demand metrics have been superseded by political risk, creating a more unpredictable trading environment that threatens economic stability worldwide.
Deutsche Bank's comprehensive report highlights a decisive shift in market drivers. The bank's research shows that price movements following geopolitical incidents in 2024 were three times more pronounced than those linked to routine inventory reports. Key flashpoints include the Strait of Hormuz (affecting 20% of global seaborne oil trade), the Eastern Mediterranean, and political shifts in West African producers like Nigeria and Angola. The bank introduces the concept of the "tariff multiplier effect," where new tariffs on energy products interact with existing geopolitical risks to amplify price swings.
Simultaneously, ING's commodities research team notes that renewed diplomatic efforts with Iran and evolving tariff policies are creating downward pressure on crude benchmarks. Renewed Iran nuclear talks in January 2025 could potentially release approximately 1.5 million barrels per day of Iranian oil within six months if successful. Market reactions were immediate, with Brent crude futures declining 4.2% during the initial 48-hour period following the announcement of renewed talks, while trading volumes surged 35% above 30-day averages.
The tangible economic impacts are significant. Deutsche Bank projects that sustained volatility could reduce GDP by 0.3-0.7% in the Eurozone, 0.5-1.2% in Southeast Asia, and 1.0-2.0% in Sub-Saharan Africa. For consumers, this translates to unpredictable costs at the gasoline pump and in heating bills, complicating household and business budgeting. ING maintains data-driven projections suggesting Brent crude will average $78-85 per barrel throughout 2025 with successful Iran negotiations, shifting to $85-92 without an agreement.
Both analyses emphasize that this new reality demands greater vigilance and more sophisticated risk models. Deutsche Bank outlines strategic considerations including diversification of energy sources, increased investment in strategic petroleum reserves, and enhanced political risk assessment. The bank notes trading volumes for specialized geopolitical risk hedging products have surged by over 40% year-on-year, reflecting the market's urgent need for new tools.
