Oil prices rebounded by nearly 1% on Wednesday, driven by renewed doubts about the stability of negotiations between the United States and Iran. However, the price increase was limited by forecasts from the International Energy Agency (IEA), which anticipates a scenario of ample crude oil availability for the next few years.
Brent crude futures closed near $80 a barrel, while West Texas Intermediate (WTI) crude advanced to nearly $77. Despite the recovery, both contracts remain close to their lowest levels since early March.
Trump’s statements bring volatility back to the market
The market’s bullish reaction came after US President Donald Trump indicated that the memorandum of understanding reached with Iran cannot yet be considered final.
The statements revived concerns about the progress of talks between Washington and Tehran and about the impact that a possible deterioration in relations could have on the global energy supply.
Furthermore, investors continue to assess the effect that a potential normalization of Iranian exports would have on the balance of the international oil market.
The IEA projects strong growth in global supply
While geopolitical factors temporarily supported prices, the International Energy Agency presented a less favorable long-term outlook for crude oil.
According to their initial analysis for 2027, global oil supply could increase by approximately 8 million barrels per day, while global demand would grow by only about 2 million barrels per day during the same period.
This difference creates a surplus scenario that could put pressure on international prices and modify the production strategies of numerous exporting countries.
Likewise, the agency believes that an improvement in relations between the United States and Iran would open the possibility of rebuilding depleted inventories and strengthening strategic reserves in different regions of the world.
US reserves provide temporary support
On the other hand, preliminary data from the American Petroleum Institute showed a drop of 8.3 million barrels in US crude oil reserves during the last week.
The reduction far exceeded market expectations and helped sustain the rally in share prices during the session.
Traders are now awaiting the release of official data from the Energy Information Administration to confirm the magnitude of the inventory decline and assess its impact on domestic demand.
Geopolitics and oversupply are shaping the course of oil prices
In the short term, uncertainty related to Iran continues to be one of the main factors influencing the global energy market.
However, analysts believe that the evolution of global supply and the capacity to absorb demand will be key in defining the future direction of oil prices.
Although geopolitical risks can cause sharp price movements, forecasts of abundant supply suggest that the market could face a period of increased downward pressure once diplomatic tensions subside.
Source: Reuters
Photo: Shutterstock
