Oil prices fell almost 20% in 2025, marking their sharpest annual decline since the Covid pandemic.
It was also the first time oil recorded three consecutive yearly losses.
Analysts say the fall reflects a heavily oversupplied market.
Global producers are pumping far more crude than demand requires.
Brent crude ended the year at about $60.85 a barrel, down from nearly $74 in 2024.
US crude followed a similar path, falling to around $57 a barrel.
The International Energy Agency expects supply to exceed demand by 3.8 million barrels a day this year.
Even Opec output restraints have failed to support prices.
Weak economic growth and the impact of Donald Trump’s trade war with China have reduced demand.
Possible easing of sanctions on Russia could add further supply.
Banks including BNP Paribas, JPMorgan Chase and Goldman Sachs expect prices to fall into the $50s.
Lower oil prices may ease inflation and fuel costs.
However, UK households face higher energy bills after Ofgem raised the price cap slightly for early 2026.
