European financial institutions: Oil prices difficult to return to pre-Middle East conflict levels in the short term

Several European financial institutions released reports on the 8th predicting that international oil prices are unlikely to fall back to pre-US-Iran conflict levels in the short term, and the market needs to pay attention to the situation in the Strait of Hormuz and the recovery of infrastructure in the Middle East. ING Group of the Netherlands stated that the news of a two-week ceasefire between the US and Iran partially alleviated concerns about long-term oil supply disruptions in the market, causing international oil prices to fall below $100 per barrel. The future trend of oil prices will depend on whether negotiations can reach a lasting agreement and whether shipping in the strait can return to normal levels. It is expected that there will continue to be fluctuations in the market during the negotiations. UBS Group stated that it is still unclear when and to what extent shipping in the strait can recover, and some oil tankers will need time to re-plan their routes. If shipping in the strait is blocked again, energy prices may rebound quickly. Additionally, even in an optimistic scenario, repairing energy infrastructure and restoring production will take weeks or even months. Therefore, energy prices are unlikely to fall back to pre-conflict levels in the short term. Barclays Bank believes that the ceasefire temporarily avoided the "worst case scenario" and opened the door to further easing of tensions, but due to damaged energy infrastructure and the uncertain outcome of the conflict, oil prices are unlikely to completely reverse quickly after rising.