Core Viewpoint - The current oil market is experiencing a dual pressure from geopolitical premiums and supply-demand dynamics, with EU sanctions increasing compliance costs for Russian oil and Middle Eastern risks triggering safe-haven buying, while oversupply and weak demand are exerting counter-pressure [1][2][3]. Group 1: Geopolitical Factors - The EU's proposal to sanction foreign companies purchasing Russian oil is part of a broader strategy to increase economic pressure on Russia and its supporters [1][2]. - The geopolitical tensions in the Middle East, particularly the recognition of Palestine by four Western countries, have complicated the energy landscape and increased oil prices due to heightened risk perceptions [1][4]. - The Brent crude oil volatility index (OVX) surged by 18% in a week, indicating a shift in pricing power from oil-producing countries to traders amid rising geopolitical risks [2][3]. Group 2: Supply and Demand Dynamics - Despite geopolitical tensions supporting oil prices, the International Energy Agency (IEA) projects a daily increase in global oil supply of 2.5 million barrels by 2025, significantly outpacing the 740,000 barrels increase in demand [3][5]. - The compliance cost premium for non-Russian oil has reached $2 to $3 per barrel due to sanctions, with Urals crude oil trading at a discount of $20 per barrel compared to Brent [2][5]. - The U.S. shale oil production capacity utilization rate has reached 92%, indicating a potential increase in non-Russian oil supply in response to sanctions [5]. Group 3: Future Outlook - Short-term oil prices are expected to fluctuate around $70 per barrel, influenced by the timing of EU sanctions and the shipping situation in the Strait of Hormuz [6]. - In the medium to long term, if Russian oil fully shifts to Asian markets, it could reshape the global refining industry, while U.S. shale oil capital expenditures are likely to rise, putting a cap on oil prices [6].

Group 1 - Oil prices have limited downside potential, but a rebound depends on expectations of Federal Reserve rate cuts and increased oil purchases from India [1][3] - OPEC's strategy has shifted from "price stabilization" to "market share," leading to increased global oil supply and downward pressure on prices [2][3] - U.S. gasoline demand during the driving season has been below 9 million barrels per day, lower than the five-year average, indicating weak consumption [2][3] Group 2 - Recent U.S. non-farm payroll data significantly missed market expectations, raising concerns about a potential economic recession and weakening oil demand forecasts [2][3] - Geopolitical risks, including the ongoing Russia-Ukraine conflict and potential U.S. sanctions on Russia, are contributing to uncertainty in global oil demand [3] - Future oil price movements will depend on the rebalancing of soft power factors, including tariff negotiations, oil-producing countries' capacity efficiency, and geopolitical reconciliation processes [3]