According to analysts, the temporary peace agreement formed between the US and Iran may not eliminate fluctuations in oil prices in the short term. Low global inventories and the time it takes for new supply from the Persian Gulf to reach the market could continue to pressure prices.
Westpac's assessment highlighted that after the prolonged closure of the Strait of Hormuz, global oil inventories began to decline and rebuilding these stocks will take time. The bank noted that while the easing of tensions is a positive development, market concerns may remain high due to ongoing uncertainties in the details.
Bart Melek, head of global commodity strategy at TD Securities, said that even if flows return to normal today, about 800 million barrels of stock will have been lost by November. According to Melek, this situation could create renewed upward pressure in the market.
Melek stated that higher oil prices remain a strong possibility and could bring inflationary effects. However, he added that if China stops using its own reserves at some point, sharp price spikes could be somewhat limited.
Willem Sels, global investment director at HSBC Private Bank and Premier Wealth, said the economic impacts of the conflict in the Middle East are already being felt in the most vulnerable areas. Sels noted that weak economic data from the most affected countries in South Asia could trigger renewed market revaluation volatility.
Asian markets found support from increased risk appetite as the US and Iran moved closer to an agreement to reopen the Strait of Hormuz. Brent crude for August delivery fell 4.87% to $83.06, while US crude dropped 5.71% to $80.03 per barrel.
Oil Supply and Inventories Will Be Decisive
Experts believe that despite the initial positive reaction to the agreement news, the key factors will be how quickly global inventories recover and how regularly shipments flow from the Gulf. Therefore, even if markets calm down, volatility is not expected to disappear completely.
Analysts commonly agree that the agreement alone may not be enough to stabilize prices permanently. Developments in the oil sector are expected to closely affect both energy markets and inflation outlook in the coming period.
