Peace isn't enough
The interim peace agreement between the US and Iran got ‘oil flowing’ and echoed positively across global markets, making investors forget about the previous day’s surprise hawkish Federal Reserve (Fed) announcement.
US crude shortly dipped below the 200-DMA yesterday (near $74.80pb) and consolidates just above the $76pb level at the time of writing this morning as the US and Iran begin a 60-day negotiation period. If tensions remain low, US crude could steady within the $60–80pb range for the next three to six months and return below $50pb within 12 months.
Lately, the IEA has become increasingly vocal that once the Middle East disruption fades and flows normalize, the market is likely to swing back into a substantial surplus in 2027. Before the Iran war, the IEA had been projecting a surplus of nearly 4 million bpd for 2026, driven by strong supply growth and relatively weak demand growth. Today, they point to a 5 mbpd surplus. Indeed, the three-month conflict and the latest spike in energy prices boosted demand for alternative energy sources.
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Author
Ipek Ozkardeskaya
ipekScope
Ipek Ozkardeskaya began her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked in HSBC Private Bank in Geneva in relation to high and ultra-high-net-worth clients.
