The geopolitical situation is slowing down and the medium- and long-term supply surplus is difficult to resolve, international oil prices fall by more than 2%.

**Source**: Wall Street Insights  

After trade tensions eased and international oil prices rebounded amid volatility, international oil prices have entered a correction phase since May 14 as negative pressures from both supply and demand sides emerged in recent days.  

Shortly after the market opened on May 15, international oil prices plummeted. As of 12:55, the main contract of U.S. WTI crude oil futures stood at $61.72 per barrel, down over 2.2%; the main contract of UK Brent crude oil futures was at $64.66 per barrel, down 2.15%.  

On the supply side, positive signals have emerged in U.S.-Iran negotiations over the nuclear issue. According to a May 15 report by China News Network citing NBC, Ali Shamkhani, a senior advisor to Iran's Supreme Leader, stated that Iran is prepared to sign a nuclear agreement with the U.S. under certain conditions, committing never to manufacture nuclear weapons, destroying its stockpile of highly enriched uranium usable for weaponization, agreeing to enrich uranium only to lower concentrations required for civilian purposes, and allowing international inspectors to monitor the process—in exchange for the immediate lifting of all economic sanctions against Iran.  

On the OPEC+ front, the group officially launched its long-delayed production restart process in April. While countries like Kazakhstan and Iraq restricted output to make up for earlier overproduction, the eight countries that agreed to increase production only added 25,000 barrels per day (bpd) in April, far below the planned 138,000 bpd. However, OPEC and its partners have decided to increase production by 411,000 bpd each month from May to June. Member states will meet on June 1 to determine July's production. Goldman Sachs expects countries to approve a third and final production increase of approximately 411,000 bpd.  

On the demand side, considering the impact of tariffs in the first quarter and demand data, OPEC's monthly report released last night maintained its oil demand growth forecasts for this year and next, projecting global crude oil demand growth of 1.3 million bpd in 2025 and 1.28 million bpd in 2026. OPEC also lowered its 2025 global economic growth forecast to 2.9% (previously 3%), while keeping the 2026 forecast at 3.1%. Notably, in last month's report, OPEC cut its oil demand expectations for the first time since December 2024, reducing the projected increase in global daily oil demand in 2025 from 1.45 million barrels to 1.3 million barrels compared to 2024, and the 2026 increase from 1.43 million barrels to 1.28 million barrels.  

"In the short term, the main trading logic for the international crude oil market is changing," explained Li Yan, an oil analyst at Longzhong Information. The positives include reduced pressure from U.S. tariff policies, the continuation of U.S. sanctions on oil-producing countries, and instability in the Middle East, while the negatives are OPEC+'s stance on maintaining production increases, the potential easing of U.S.-Iran tensions, and weak global oil demand.  

Zhengxin Futures Research Institute stated that after the upward drive of oil prices caused by the easing of global trade conflicts, subsequent oil prices may be mainly guided by the geopolitical situation and OPEC+ production situation. The contradiction between the slowdown in the geopolitical situation and the medium- and long-term supply surplus caused by OPEC+ production is still difficult to alleviate. It is expected that oil prices will fall after the short-term fluctuation is restored, and fluctuate in the range of US$55-65.

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