Geopolitical Risk Analyzed

Oil prices haven’t crashed this week, even with worries about Iran and the US. This is because there’s a lot of uncertainty in the Middle East, and things could change quickly. Plus, less oil is being produced, which pushes prices up. Let’s break it down simply:

Key Points

• Tensions between Iran and the US eased briefly.
• Oil supplies are lower due to fires in Kazakhstan.
• Trade wars are a worry, threatening global growth.
• The EU might punish the US with more tariffs.
• OPEC+ is keeping oil production steady to manage supply.
• Oil demand is rising, but supply is growing faster.

The biggest problem is that there’s too much oil being made and not enough people wanting it. Demand for oil is going up, but it’s not going up as fast as the amount of oil being produced. This makes oil prices less stable and more prone to going down.

The United States, Brazil, and Guyana are making a lot of oil. They’re producing oil at record levels. OPEC+ is also keeping its oil production the same, which doesn’t help to balance things out. This is adding to the worry of too much oil on the market.

Experts think oil prices could drop to around $52 for West Texas Intermediate (WTI) by the middle of 2026, and around $56-57 for Brent. These are predictions, and things can change quickly in the world of oil.

The global oil market faces a challenge: supply is growing faster than demand.