Oil Prices Seen Falling Below $40 as Iran Supply Crunch Deepens Recession

1 articles · Updated · OilPrice.com · Jun 30

Oil could drop below $40 a barrel even as Iran-related supply disruptions worsen, with the report arguing recession and forced demand cuts will outweigh the usual price impact of shortages.
WTI has already drifted back near pre-war levels since the Feb. 28 conflict began, while higher transport costs, work-from-home orders, reduced flights and weak consumer spending have curbed fuel demand.
U.S. oil buffers are described as dangerously low, with Trump saying on June 17 reserves could run out in about four weeks without a deal and reports warning of possible gasoline shortages by July 4.
The report says actual shortages may show up less in benchmark prices than in empty shelves, delayed parts and medicine gaps, as governments prioritize essential services and restrict nonessential fuel use.
Its broader view is that shrinking energy supply forces economies to contract, pushing lower inflation and rate pressure but a deeper recession, broken supply chains and years of disruption.