Recent geopolitical events have introduced a $3–$5 risk premium into the 2025 oil price forecast, impacting forward volatility surfaces for both Brent and WTI contracts. Russia, the largest producer in the cartel after Saudi Arabia, depends on high prices to finance its war machine against Ukraine, but unlike Riyadh, has limited potential to increase production due to US and European pressure on its oil sector. If the price of oil continues falling, that would lead to a significant decline in rig count, according to an analysis by J.P. Morgan, projecting that the rig count would fall by up to 30% to around 300 rigs. That would put us back to the rig count numbers we were seeing in 2020 during the pandemic . Several hedge funds are skewing long on the 2025 oil price forecast, using long-dated futures and energy index swaps to capture potential upside from tightening global supply balances.