Oil Prices Soar as Geopolitics Weigh on Consumption
Crude Oil prices remain elevated due to concerns over a potential US-Iran deal, according to BNY. The International Energy Agency (IEA) reports that global oil markets tightened further in July, with demand, supply, refining runs, and inventories all impacted by geopolitical disruptions and high fuel prices.
The IEA notes that the 2026 oil demand outlook was revised lower, with a decline of 1.6 million barrels/day (b/d) expected - a reduction of 510k b/d from last month's estimate. This downward revision is attributed to the closure of the Strait of Hormuz and high prices weighing on consumption.
Supply levels rose to 101.5 million b/d in July but remained below year-earlier levels, with Gulf output largely shut in. Refinery crude throughputs climbed to 80.9 million b/d in July but were nearly 5 million b/d below last year's levels, with further cuts to Q3 runs expected.
Observed inventories fell by 69 million barrels in July, while Crude prices swung sharply higher amid backwardation and tighter product markets.