Oil tumbles nearly 7% as U.S. and Iran seen moving closer to deal
“The underlying supply shortfall of 10-11 million barrels per day does not go away immediately and will see markets still drawing inventories until Middle Eastern crude production is back online, which is months away.” — June Goh, Senior Oil Analyst at Sparta Commodities
- Expert: June Goh (Senior Oil Analyst, Sparta)
- Publication: Reuters
- Market Focus: Crude Oil, Supply Flows, Middle East Production, Inventory Draws
- Geographies: Middle East, Strait of Hormuz, Iran, Global
In a recent analysis for Reuters, Sparta’s Senior Oil Analyst, June Goh, warns that a potential US-Iran deal would not immediately resolve the oil market’s supply problem, with a shortfall of 10-11 mb/d persisting until Middle Eastern crude production comes back online. Even if a peace deal is struck, damaged oil and gas infrastructure means a return to normal flows through the Strait of Hormuz is still months away. Markets drew down inventories sharply as Brent fell nearly 7% to $96.30 on deal optimism, but Goh cautions the physical picture hasn’t changed yet. Traders should watch actual flow data through the Strait — not deal headlines — as the clearest signal of when supply tightness begins to ease.
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