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Oil and Gas Price Update: Q2 2025 in Review
Additionally, signs of cooling economic growth in China and renewed trade war anxiety between the US and China further pressured market sentiment. As concerns over a trade war and energy tariffs subsided, prices were able to rally through the rest of May and June to hold in the US$78.42 and US$77.19 range for Brent and WTI, respectively.
Now approaching the year-to-date high level global strife and potential supply constraints are adding support.
During an International Energy Agency (IEA) presentation, Fatih Birol, executive director of the IEA, addressed the current challenges in the global landscape, particularly the mounting conflict in the Middle East.
“The situation is still unfolding, and there are many uncertainties (about) how and if it is going to have structural impacts on the oil and energy markets,” he said, noting that the IEA would not be speculating.
However, Birol did underscore Iran’s position in the global oil market.
“According to our oil market report, currently, Iran produces about 4.8 million barrels per day (mb/d) of crude, condensate and NGL and exports are around 1.8 mb/d of crude oil and 800,000 b/d of products,” he said. “For now, when we look at the markets, we do not see a major supply disruption.”
Demand expected to trend lower
Although the regional conflicts have infused uncertainty into markets, longer term fundamentals like supply and demand trends are painting a volatile picture.
As noted in the IEA’s recently released Oil 2025: Analysis and Forecast to 2030 report, supply is likely to outpace demand this year and next.
“Our expectations for demand growth are much less than the supply growth,” explained Birol. “We expect demand this year to grow about 700,000 barrels per day, whereas the supply growth we expect is more than double, about 1.8 mb/d.”
More broadly, the IEA report forecasts global oil demand to rise by 2.5 mb/d between 2024 and 2030, reaching 105.5 mb/d by decade’s end.
However, most of that growth will occur early in the period, with gains slowing after 2026 and dipping slightly by 2030. Weaker economic growth and a shift away from oil use in transportation and power generation are the main factors behind the long term slowdown.
Much of the demand forecast is dominated by powerhouse countries US and China which account for 20 mb/d and 13 mb/d respectively, comprising 33 percent of global demand. As such changes to either country's market can have a large sale effect across the sector.
“When we look at the supply side, global oil production in the last 10 years or so, more than 90 percent of the growth came from the United States. And on the demand side, more than 60 percent of the global oil demand growth came from China,” said Birol. “This came almost parallel and simultaneously.”
Now, again working in tandem, US oil production growth is slowing due to economic and geological factors, while China’s oil demand is also losing momentum as its economy shifts and its transportation sector evolves according to Birol.
Economic headwinds could impede demand
Economic concerns are also an issue across the globe, and historically gross domestic product is heavily correlated to oil demand.
Global GDP is expected to grow at an average annual rate of 3 percent through 2030, but that growth is uneven. OECD countries will see slower expansion at 1.8 percent, while non-OECD nations are projected to grow at 3.9 percent.
This global pace falls short of the 2010s trend, with factors like aging populations and reduced globalization weighing on long-term growth and trade.
China’s slowdown is particularly sharp, with its annual GDP growth nearly four percentage points lower than in the previous decade due to structural economic and demographic challenges.
While GDP remains a key driver of oil demand, its influence is fading.
Oil consumption is set to rise in 2025 and 2026 in line with economic growth, but from 2027 onward, demand is expected to plateau and then slightly decline. That shift is being driven by the growing use of alternatives in transportation and power generation.
Supply growth steady through 2030
Despite a projected decline in US output, the IEA expects oil supply to remain robust in other regions.
“We expect between now and 2030, about 5 mb/d of additional production capacity,” the CEO of the IEA remarked.
“A big chunk of it is coming from what we call the American quintet, namely US, Brazil, Canada, Guyana and Argentina. These five countries will bring a lot of oil to the markets.”
Providing a more detailed look at the supply picture, Toril Bosoni, head of oil industry and markets division at the IEA reiterated that global oil supply is on track to outpace demand through 2030, offering a stabilizing force in an otherwise uncertain energy landscape.
As Bosoni explained, supply is expected to grow by 1.8 mb/d in 2025, a trend largely being driven by non-OPEC+ countries, particularly in the Americas.
Additionally, natural gas liquids are playing an increasingly important role in this growth, as US shale production shifts focus and Saudi Arabia expands its gas-linked output.
“Looking into the next year, from 2025 until 2030 we can see that the United States is still a big source of supply growth, but the pace of growth is much slower than what we have seen for the past decade, and it's largely driven by gas liquids, as activity in the shale patch is slowing down and getting more into the gas side,” said Bosoni.
IEA data projects total global oil supply capacity to rise by about 5 mb/d by the end of the decade. Most of this growth will come from outside OPEC, and is closely aligned with rising demand for petrochemical feedstocks, such as ethane and naphtha, which bypass the traditional refining process.
However, traditional crude supply is expected to see only modest gains unless additional projects—many of which have yet to reach a final investment decision—move forward.
The refining sector, meanwhile, may face increasing pressure as fuel demand flattens and high-cost plants, particularly in Europe and parts of Asia, become less competitive.
Despite slowing demand, the coming years are expected to bring ample supply—helping to buffer against geopolitical shocks and lending some reassurance to markets amid broader global economic headwinds, Bosoni added.
Natural gas market remains positive
The natural gas markets faced heightened volatility through H12025, driven by several key factors. A milder-than-expected winter in major consuming regions like the US and Europe led to weaker heating demand, pushing prices lower early in the year.
However, Q2 saw a rebound as unseasonably hot weather in Asia and parts of North America boosted cooling demand. Supply disruptions, including maintenance delays at major LNG export facilities in the U.S. and Australia, further tightened markets.
Starting the year at US$3.65 per metric million British thermal units, prices rose to a H1 high of US$4.49 in March, before falling to a H1 low of US$2.99 in late April.
Geopolitical tensions, particularly instability in the Middle East affecting shipping routes, added upward pressure through May and June pushing prices back above US$4.00 by mid-June.
Natural gas price performance, December 19, 2024, to June 19, 2025.
Chart via The Investing News Network.
Natural gas supply growth to outperform oil
Natural gas liquids (NGLs) are emerging as a major driver of global oil supply growth through the end of the decade, with output forecast to rise by 2 mb/d to 15.5 mb/d by 2030, according to the IEA.
Much of this increase will come from North America and the Middle East, which will account for nearly half of all global supply gains over the next five years.
As noted in the report, the surge is being fueled by rising production from lighter, gas-rich fields and unconventional reserves.
The US, already the top NGL producer, will increase output from 6.9 mb/d in 2024 to 7.8 mb/d in 2030. Saudi Arabia is set to boost production from 1.4 mb/d to 2 mb/d over the same timeframe, while Canada will add 300,000 b/d.
This expanding supply is feeding demand for petrochemical feedstocks like ethane, propane and butane, vital in the production of everything from plastics to clean cooking fuel.
Ethane demand alone is expected to climb by 610,000 b/d to 5.2 mb/d by 2030, while LPG consumption is forecast to rise by 1.3 mb/d to 11.8 mb/d. Asia—led by China and India—will account for more than 65 percent of global LPG demand growth.
The rise of NGLs also poses a long-term challenge to traditional refining, as many of these products bypass refining altogether. With petrochemical demand outpacing that for transportation fuels, refiners may face margin pressure and shutdown risks, particularly in high-cost regions like Europe and parts of Asia.
Despite slower year-over-year growth, the IEA sees NGLs playing an increasingly vital role in shaping the future energy mix. This is supported by the 216 percent increase in production the NGL sector has seen over the past decade.
“From 2014 to 2024, global NGLs production grew by 4.3 mb/d to 13.6 mb/d. NGLs will rise by a further 2.0 mb/d to 15.5 mb/d in 2030, with average annual growth slowing to 2.3 percent over the forecast period, from 3.9 percent during the previous decade,” the report read.
Much of the IEA’s outlook falls inline with the short term price projections the US Energy Information Administration released in May, which forecast the average price for Brent crude to be US$66 in 2025 and US$59 in 2026. While natural gas prices will rise from an average US$4.10 in 2025 to US$4.80 in 2026.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Coelacanth Energy
Investment Insight
Coelacanth Energy presents strong growth potential in the Canadian light oil and natural gas sector with encouraging well test results, a robust infrastructure buildout, and a management team with a track record of repeated success, making it a compelling growth story.
Overview
Coelacanth Energy (TSXV:CEI) is a junior oil and natural gas exploration and development company, focusing primarily on the prolific Montney region in northeastern British Columbia, Canada. With a substantial landholding of approximately 150 net sections in the Two Rivers area of Montney, Coelacanth is strategically positioned to harness the potential of one of the most resource-rich natural gas basins in North America.
Coelacanth distinguishes itself with a two-pronged strategy: near-term production growth and long-term resource development. Supported by advanced geological delineation and a robust infrastructure buildout, the company is poised to scale efficiently as it transitions from exploration to production.
Backed by a management team that has built and sold six successful oil and gas companies, Coelacanth is focused on delivering returns through disciplined capital deployment and operational execution.
The Montney Advantage
The Montney Formation spans British Columbia and Alberta and is known for its high levels of recoverable natural gas and liquids. Montney has attracted numerous large oil and gas producers, including companies like Canadian Natural Resources (CNQ), Shell, ARC Resources (ARX), Tourmaline Oil Corp (TOU), and ConocoPhillips (COP). The presence of such large players highlights the importance of this region in contributing to both the Canadian and global energy markets.
Coelacanth’s landholdings are strategically located in the Two Rivers area of Montney, giving it access to a highly productive portion of the basin. Unlike many junior exploration companies, Coelacanth is drill-ready, positioning it favorably among its peers. By securing significant infrastructure and landholdings, Coelacanth ensures its ability to tap into the natural gas and oil resources that lie beneath its properties, a key advantage in the competitive Montney region.
Company Highlights
- Over 150 net sections of contiguous land in the Two Rivers area, located in the Montney geological fairway, a prolific oil and liquids-rich natural gas region.
- Strategic proximity to major producers like ARC Resources, Tourmaline Oil Corp, Shell and ConocoPhillips.
- Fully permitted and funded infrastructure development program, with first production from Two Rivers East Pad started in June 2025 and expected to ramp through the summer.
- Phase 1 facilities will support initial production of 8,000 boe/d; Phase 2 will add compression and double total capacity by Q4 2025.
- Nine wells have been drilled and tested at the 5-19 pad, collectively flowing at over 11,000 boe/d in flush test rates.
- Estimated production growth: 4,000 boe/d in 2025; 11,000 boe/d in 2026; 15,000 boe/d in 2027.
Key Projects
Two Rivers East and Two Rivers West
The Two Rivers Montney development is the cornerstone of Coelacanth’s growth strategy. This multi-zone resource play features Lower, Upper, Basal and Middle Montney formations, offering significant running room for future development. The company has drilled and tested nine wells on the 5-19 pad (seven Lower Montney, one Upper, one Basal), yielding impressive flush production test rates totaling more than 11,000 boe/d, on a combined basis. Some wells tested at over 1,200 boepd with 50 percent light oil, highlighting strong liquids yields.
Two Rivers Asset Advantage
Two Rivers East started first production in June 2025, with production to be systematically ramped up over the summer. This production is supported by a new Phase 1 facility capable of processing 30 mmcf/d of gas and associated oil. Phase 2, planned for late 2025, will double capacity with added compression.
The Two Rivers West project, already in production, complements the East project with upside in the Upper Montney and delineation potential across additional benches. Test wells have demonstrated commercial deliverability and support long-term production sustainability.
Market Access and Takeaway Agreements
Coelacanth has secured long-term gas takeaway for its growing production base. The company holds firm commitments for up to 100 mmcf/d of natural gas takeaway capacity and has secured processing capacity of up to 60 mmcf/d at a third-party facility. Oil and condensate produced from the Montney light oil window can be trucked to regional terminals or connected via infrastructure to major hubs including Fort Saskatchewan, Edmonton and Prince George.
On the gas side, Coelacanth has egress options through pipelines such as NGTL, Westcoast and Alliance, and is strategically positioned to benefit from future access to LNG Canada via the Coastal GasLink system.
Board and Management
Rob Zakresky – President and CEO
Rob Zakresky has a significant background in the oil and gas sector, previously serving as the president and CEO of Leucrotta Exploration as well as five additional predecessor companies. He has been with Coelacanth Energy since its inception and is recognized for his strategic leadership and focus on enhancing shareholder value. His expertise in financial management and operations is reflected in his approach to driving the company's growth.
Bret Kimpton – Vice-president of Operations and COO
Bret Kimpton joined Coelacanth Energy in 2022, bringing a wealth of experience from his previous role as vice president of production at Storm Resources, where he contributed to significant production growth. He has a strong background in construction and operations, especially in the Montney region of British Columbia, managing various fields. His role at Coelacanth focuses on overseeing operational efficiency and implementing the company's growth strategies.
Nolan Chicoine – Vice-president of Finance and CFO
Nolan Chicoine has also been with Coelacanth Energy since its inception. His responsibilities encompass financial oversight, including financial planning, reporting, and analysis. He plays a crucial role in aligning the financial strategies with the company's operational goals. His background includes significant experience in financial management as CFO for Leucrotta Exploration, Crocotta Energy, and Chamaelo Energy.
Jody Denis – Vice-president of Drilling & Completions
Jody Denis is the former drilling, engineering & operations engineer at Leucrotta Exploration. Prior to that, he was senior operations advisor at Black Swan Energy, drilling manager at ARC Resources, and drilling and completions manager at Birchcliff Energy.
John Fur – Vice-president Geosciences
John Fur is the former manager, exploration of Leucrotta Exploration, and former senior geophysicist at Crocotta Energy, Chamaelo Energy, Chamaelo Exploration, Viracocha Energy, Canadian Natural Resources, Post Energy, Amber Energy and Husky Oil.
