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Anxiety regarding the worldwide financial system is still impacting the oil industry. Today, crude oil experienced a drop to $67.35, evaluating the low points from after Saudi Arabia made cuts. However, bullish investors countered the dip, resulting in a modest decline by the end of the day.

However, the fact remains that this was the second day of sales alongside a third consecutive drop in sales in the last four weeks. A more significant issue affecting sales this week was the mounting proof that Iran’s exports are reaching the market.

The notion that Iran is exporting more oil than initially estimated, and potentially almost at their maximum production level, can clarify why the global oil market seems much more abundant than it is. The positive aspect for investors is that there would be less extra capacity available if/when an agreement with Iran is established. Additionally, if Trump wins a second term in office, the US might adopt a more stringent approach towards Iran, decreasing the supply of oil in the market.

The essential factor for the future is reducing inventory. The US will stop selling oil from its Strategic Petroleum Reserve this month and has no plans to do so until 2026. This, in conjunction with the upcoming summer driving season and Saudi Arabia’s planned cuts starting from July 1, will result in a shortage in the market during the second half of the year. However, this shortage has been expected for a long time, so it is uncertain whether it will have a significant impact. To make a real difference, it may require considerable decreases in US supplies and China’s proactive actions.

Incentive to cause a change in direction.

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