Post-ceasefire glut: The world is awash in crude oil right now

West Asia remains tense but the world has more oil than it requires

- JAVIER BLAS

After the war, the hangover. While hysteria about the closure of the Strait of Hormuz gripped the oil market for the last few days, the reality could not be more different: a wave of Gulf crude oil was forming. Now, the swell is heading into a global oil market that's already oversupplied—hence Brent crude was trading below $70 a barrel on Tuesday [after US President Donald Trump announced a surprise ceasefire between Israel and Iran].

The Northern hemisphere summer, which provides a seasonal lift to demand, is the last obstacle before the glut becomes plainly obvious. Oil prices are heading down—quite a lot.

If anything, the Israel-Iran '12-Day War' has worsened the supply-versus-demand imbalance even further—not just for the rest of 2025, but perhaps into 2026 too.

On the demand side, geopolitical chaos is bad for business—let alone tourism. Petroleum consumption growth, already quite anaemic, is set to slow further, particularly in West Asia. But the biggest change comes from the supply side: The market finds itself swimming in oil.