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Middle East peace deal could herald oil glut next year, IEA says

‘Gradual’ return of flows will give way to sharp rise in production, outstripping forecasts for increased demand
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{"text":[[{"start":7.95,"text":"A glut of oil will emerge next year if the peace deal in the Middle East holds, the International Energy Agency predicted on Wednesday, as crude production surges in the wake of the Iran conflict."}],[{"start":19.7,"text":"The IEA’s monthly report on the oil market took its first look at the aftermath of the war, as the US and Iran prepare to sign an interim peace deal on Friday that will extend the current ceasefire for 60 days."}],[{"start":32.8,"text":"There will be a “gradual” resumption of oil flows from the Gulf this year as countries start to revive oilfields that have been shut for months, IEA analysts said. Production would then rise by 8mn barrels a day (b/d) to 110mn b/d by next year, far ahead of a “relatively modest” 2mn b/d rise in global oil demand, they added. "}],[{"start":54.55,"text":"This will create a “significant overhang” that “may provide a welcome respite to the market and an opportunity to replenish depleted inventories, or to build new strategic reserves”. The agency noted oil stocks in OECD countries have now fallen to their lowest level since 1990. "}],[{"start":72.55,"text":"Oil prices have fallen sharply since the deal between Washington and Tehran was announced at the weekend. Brent crude, the international benchmark, was trading at about $78.50 a barrel on Wednesday, down from about $87 at the end of last week and a peak of $126 a barrel at the end of April. West Texas Intermediate, the US benchmark, was trading just above $75 a barrel, down from a peak of just under $120."}],[{"start":99.85,"text":"Countries such as the United Arab Emirates, which left the oil producer group Opec during the crisis, are poised to expand production, while Saudi Arabia has said it can return to its prewar production levels in just three weeks. Meanwhile, the US, Brazil and Venezuela have all increased their production in recent months in response to the war. "}],[{"start":120.6,"text":"While the recovery from the crisis is yet to begin in earnest, oil traders have sold heavily since the interim deal was announced on Sunday. Benchmark Brent crude stood at under $79 a barrel on Wednesday, its lowest level since the early days of the war."}],[{"start":137.45,"text":"The IEA noted that oil prices had already plunged between May and mid-June, with North Sea crude prices collapsing by more than $40 a barrel to about $82 as traders held out for a peace deal and as China and Japan sharply reduced their buying by a combined 6mn b/d."}],[{"start":163.2,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1781688181_1714.mp3"}

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