Barclays said that as supply recovers and demand changes, oil prices are at a crossroads.

Barclays said that after reaching an agreement between the United States and Iran, the oil market faces three possible paths as geopolitical risks ease. In a bullish scenario, normalization of trade supplies through the Strait of Hormuz may drive consumption rebound and trigger inventory replenishment, while logistics bottlenecks could delay a full supply recovery, thus pushing up oil prices. Analysts at the bank said that the second, more balanced outcome is that oil prices stabilize after an initial decline as the market adjusts to expectations of increased supply and lower risk premiums. Iran's exports will only gradually recover, helping to stabilize oil prices above pre-conflict levels. In a more bearish scenario, with traders expecting more crude from Iran as well as increased production from Saudi Arabia and the UAE, oil prices will continue to fall. Barclays said that even with slow growth in spot quantities, expectations of future supply alone will push down crude oil prices.