US-Iran peace agreement releases massive crude oil supply, reigniting global oversupply concerns.

Odaily Planet Daily News: As the US and Iran reached a peace agreement that releases a large amount of supply, oil prices have fallen across the board. With demand unable to absorb it, the market is once again discussing the issue of crude oil oversupply. This is a startling reversal. Less than three months ago, the main global physical crude oil benchmark prices were already at record highs; and only a few weeks ago, senior industry executives were warning that due to the Iran crisis, global inventories had fallen to extremely low levels. In addition to the immediate impact brought by the reopening of the Strait, analysts at institutions such as Morgan Stanley and Goldman Sachs have all warned this week that the market faces the risk of a supply surplus next year.

Kit Haines, head of oil research at the energy consultancy Energy Aspects, said: “Right now, the prevailing sentiment in the market is bearish.” Even before the US and Iran signed a memorandum of understanding in mid-June to reopen the Strait of Hormuz, suppliers in the Persian Gulf had already been stepping up shipments. And in the weeks following the signing of the agreement, more than 60 million barrels of crude oil that had been trapped because of the outbreak of war flooded into the market. (Jinshi)