I. Outlook for the International Crude Oil Market

The geopolitical conflict that persisted for over three months has finally settled, and the anticipation of a reconciliation agreement between the US and Iran is causing significant volatility in the international crude oil market. This major development acts as a key bearish factor suppressing oil prices; in the short term, it will accelerate the downward trend of international oil prices, with both WTI and Brent benchmarks likely to breach the critical support level of $80 per barrel. As market sentiment gradually absorbs this news, the rate of decline will moderate, marking a transition into an adjustment phase aimed at supply-demand rebalancing. Based on an analysis of various factors, the mainstream trading range for international crude oil is expected to settle between $75 and $85 per barrel, following a pattern of "sharp initial decline followed by a gradual drop."

II. Analysis of Supply-Side Impacts on the Domestic Refined Oil Market

The conclusion of the US-Iran agreement will substantially improve the landscape for domestic crude oil imports. With shipping through the Strait of Hormuz returning to normal, transportation barriers for domestic refineries will be significantly reduced, effectively alleviating the high premiums and transportation costs previously caused by geopolitical risks. This means domestic refineries will no longer face the pressure of high-cost crude oil, and feedstock procurement costs are expected to drop significantly. Against this backdrop, there is a clear expectation that refinery operating rates will rise. On one hand, eased cost pressures will boost production enthusiasm; on the other, enhanced stability in crude oil supplies provides the necessary assurance for refineries to increase their operating loads. Both independent refineries and major state-owned refineries are expected to gradually increase processing volumes; consequently, domestic crude oil processing is likely to see a steady recovery, leading to a more abundant supply of refined oil products.

III. Assessment of Demand-Side Changes in the Domestic Refined Oil Market

Regarding demand, the dampening effect of previously high oil prices on consumption will gradually dissipate as prices fall, potentially releasing some of the suppressed demand for refined oil products. Coupled with the travel peak during the upcoming Dragon Boat Festival, gasoline consumption is expected to rebound in the short term, although the overall scope for demand recovery remains relatively limited. On one hand, the substitution of traditional internal combustion engine vehicles by new energy vehicles continues to manifest; the consumption lost due to this structural shift is unlikely to be recovered simply through falling fuel prices. On the other hand, the foundation for macroeconomic recovery remains fragile; the restoration of consumer purchasing power and the willingness to travel will take time, and growth in fuel demand from the industrial and commercial sectors remains sluggish. Overall, while there are expectations for an improvement in refined oil demand, the scope for total volume growth is limited, making significant expansion unlikely.

IV. Outlook for the Refined Oil Export Market

Regarding exports, as international oil prices retreat and domestic supplies of refined oil remain ample, policies controlling refined oil exports are likely to be moderately relaxed. This will provide an outlet for surplus domestic refined oil resources, leading to expected growth in export volumes. Increased exports can alleviate domestic supply pressure while helping refineries improve economic efficiency, thereby providing some market support.

V. Impact of Inventory Pressure on Market Trends

Currently, domestic refined oil inventory levels are generally high, with stocks at both major state-owned enterprises and independent refineries sitting at relatively elevated levels. As refinery operating rates rise and supply increases, inventory pressure will intensify further. High inventory levels, combined with expectations of increased supply, will exert sustained downward pressure on the refined oil market, making wholesale prices prone to falling rather than rising.

In summary, expectations of a drop in crude oil prices—driven by the potential US-Iran agreement—will impact the domestic refined oil market across multiple dimensions, including costs and supply-demand dynamics. Overall, domestic refined oil prices are expected to follow the downward trend of crude oil; however, given the limited recovery in demand and the regulatory role of export policies, the magnitude of the price decline may be smaller than that of crude oil. The market is set to enter a new phase characterized by lower costs, loose supply-demand conditions, and intensified competition.

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