fiisual Biweekly Oil Report: Three Major Agencies Simultaneously Lower Demand Growth Forecasts; U.S.–Iran Memorandum of Understanding Significantly Reduces Geopolitical Risks
Over the past two weeks, market attention has shifted from war risks to the progress of peace negotiations. Earlier this month, the conflict between Israel and Iran escalated. However, as the United States and Iran reached a ceasefire memorandum through mediation efforts by countries including Pakistan, the market began reassessing the possibility of a recovery in Middle Eastern supply. As a result, the geopolitical risk premium rapidly dissipated, and oil prices retreated significantly from their highs.
Nevertheless, considerable uncertainty remains regarding the reopening of the Strait of Hormuz, the recovery of Iranian oil exports, the process of sanctions relief, and the outcome of subsequent nuclear negotiations. Consequently, market sentiment continues to fluctuate between expectations of supply recovery and the actual pace of supply restoration.
Meanwhile, the continued sharp decline in U.S. crude oil inventories, refinery operations approaching full capacity, and the rapid depletion of global strategic petroleum reserves indicate that the global energy market remains in a low-inventory environment and is still undergoing supply-chain reconstruction. The supply-demand balance has yet to fully return to pre-war conditions.
At the same time, the latest monthly reports from the three major agencies show that, amid elevated fuel prices, supply shortages, and disruptions to trade flows, all three organizations have revised downward their 2026 oil demand growth forecasts. The downward revisions by the EIA and IEA were particularly significant, whereas OPEC remains relatively optimistic, believing that economic growth in major economies and emerging markets continues to demonstrate resilience. As a result, OPEC only slightly reduced its 2026 demand growth forecast and raised its 2027 demand growth forecast to 1.7 million barrels per day.
