Will the US-Iran agreement lower oil and gas prices?

[00:00:00]The paper trading markets are celebrating the US Iran framework agreement and the geopolitical risk premium is melting away. Brent crude has come back down to around $79. European gas has gone down to about 45 euros. But it's important that we don't confuse a sentiment rally with structural reality.

[00:00:18]Look at the math. Even after this massive sell-off, today's European TTF natural gas prices are still 35% higher than the 2024-2025 averages.

[00:00:28]Don't forget that Brent crude was $62 in December last year and $68 before the war started. TTF natural gas average 34 euros in 2025. It's 48 euros average so far this year.

[00:00:40]The markets think we're heading back to the old baseline, but many analysts believe that the supply and demand fundamentals won't support lower prices for the time being. Well, first, global oil reserves have gone down significantly. Second, rebuilding the strategic inventories will consume millions of barrels.

[00:00:57]Third, Gulf oil and gas fuels will take considerable time to safely ramp back up. And fourth, normalizing maritime shipping through the Strait of Hormuz is a matter of weeks and months, not days.

[00:01:08]Many shipowners are confirming that they will not immediately send their vessels through the strait. They're waiting for permanent security guarantees.

[00:01:16]Furthermore, delayed and rerouted tankers are completely out of position and they have to be relocated. Experts point out that a true notable recovery to pre-war Gulf supply levels will take several months, probably until the end of the year.

[00:01:30]Eventually, I think the oil side will balance out. The IEA projects that by 2027, global production will comfortably outpace consumption by several million barrels. But on the gas side, it's a different story. Europe and Asia will face a longer period of structural shortages. On the other hand, the US shale machine continues to accelerate production rapidly and will flood global markets with LNG. I think that's why there's so many LNG tankers currently being built in so many shipyards. So, just follow me for more macro energy math.