Middle East Supply Surge Drives Oil Prices Down to Pre-War Levels
Oil prices have plummeted to levels seen before the Iran war began in February as rising supply from the Middle East outweighs demand concerns. Brent crude futures for August delivery fell by $1.08, or 1.46%, to $72.66 a barrel, while US West Texas Intermediate lost $0.84, or 1.19%, to $69.50 a barrel.
Rising Middle Eastern supply is driving down prices of physical crude oil cargoes worldwide. Goldman Sachs predicts that Iran will not see a significant increase in production even if sanctions relief extends beyond August 21. China is likely to remain the main buyer of Iranian crude, as EU and UK sanctions on Iranian oil and vessels remain in place.
Iraq is considering all available options if its OPEC quota is not significantly increased, including potentially leaving the producer group. This follows the surprise exit of the United Arab Emirates from OPEC earlier this year.