Guotai Junan: If short-term geopolitical tensions escalate, there is still a possibility of pushing up oil prices.

Guotai Haitong released a research report stating that in June 2025, boosted by the risk appetite from the China-US trade negotiation meeting, relatively mild inflation in the United States, declining crude oil inventories, and escalating geopolitical conflicts in the Middle East, oil prices accelerated rebounded. On June 13, 2025, due to disturbances in the Middle East situation, both Brent crude oil futures contracts and WTI crude oil futures contracts surged by over 8%. Due to the easing of trade conflicts, OPEC+, EIA, and IEA forecasted a slight increase in global crude oil demand month-on-month. In the short term, there is still a possibility of pushing up oil prices if geopolitical tensions escalate. Guotai Junan's specific analysis is as follows: Accelerated rebound in oil prices in June 2025. In June 2025, oil prices accelerated rebounded due to the risk appetite boosted by the China-US trade negotiation meeting, relatively mild inflation in the United States, declining crude oil inventories, and escalating geopolitical conflicts in the Middle East. On June 13, 2025, due to disturbances in the Middle East situation, both Brent crude oil futures contracts and WTI crude oil futures contracts surged by over 8%, with WTI crude oil reaching a high of $74.35 per barrel, the highest since February 3, and Brent crude oil reaching a high of $75.28 per barrel, the highest since April 2. OPEC+ continues to increase oil production. From May to July 2025, OPEC+ increased production three times in a row, with a large increase of 411,000 barrels per day each month, totaling over 1.2 million barrels per day for three consecutive months, the largest increase since 2020. However, nearing the peak summer season for production increases, geopolitical disturbances, among other factors, have led to oil prices rising instead of falling. Non-OPEC+ countries: Providing about 1 million barrels per day of supply increment annually from 2025 to 2026. From 2025 to 2026, non-OPEC+ countries in the Americas, mainly the United States, Brazil, and Canada, continue to provide incremental oil supply. According to OPEC+ monthly reports, non-OPEC+ countries are expected to increase oil production by 810,000 barrels per day and 800,000 barrels per day year-on-year in 2025 and 2026 respectively, with the United States increasing by 330,000 barrels per day in 2025 and 280,000 barrels per day in 2026, Brazil increasing by 160,000 barrels per day in 2025 and 170,000 barrels per day in 2026, and Canada increasing by 120,000 barrels per day in 2025 and 110,000 barrels per day in 2026. Crude oil demand: Slight increase month-on-month. According to the mean forecasts of OPEC+, EIA, and IEA, global crude oil demand is expected to increase by 1,013,000 barrels per day and 980,000 barrels per day year-on-year in 2025 and 2026 respectively. OPEC+ expects crude oil demand to increase by 1,300,000 barrels per day in 2025 and 1,280,000 barrels per day in 2026, EIA expects crude oil demand to increase by 1,000,000 barrels per day in 2025 and 900,000 barrels per day in 2026, and IEA expects crude oil demand to increase by 740,000 barrels per day in 2025 and 760,000 barrels per day in 2026. Crude oil inventories: At near five-year lows. Since the second half of 2020, under the impetus of improving demand and OPEC+ production cuts, the global crude oil market has entered a destocking phase. Currently, global crude oil inventories are still at near five-year lows. At the same time, the United States plans to replenish its strategic reserves. Before the Russia-Ukraine conflict, the United States' strategic crude oil reserves were approximately 580 million barrels, and since then, the gradual release of strategic reserves has stabilized oil prices. As of June 6, 2025, the United States' strategic crude oil reserves were approximately 402 million barrels, showing an overall trend of replenishing since August 2023, but still at historically low levels since 1984. Risk warnings: Significant fluctuations in oil prices; policies falling short of expectations, etc.