Oil prices slide as worries about Iranian supply ease and global glut seen in 2025

 The International Energy Agency predicted a "sizable" global surplus of the commodity next year, which resulted in a sharp drop in oil prices on Tuesday.

Following media reports that Prime Minister Benjamin Netanyahu informed the United States that Israel may avoid targeting Iranian nuclear and oil sites, Israel has stated that it will ultimately decide on its response to Iran's attack on October 1 based on its own national interests. However, Israel has stated that it will take into consideration the opinions of the US. US authorities have clarified they don't believe Israel should focus on those destinations.

After losing 2% in the previous trading session, the price of a barrel of Brent crude, the global benchmark, decreased by just over 5% to $73.5. Similarly, the US oil benchmark, West Texas Intermediate, extended Monday's losses by falling more than 5% to $70.

"Oil was lower (Monday) on reports that Israel wouldn't focus on Iran's oil offices," Mohit Kumar, a financial specialist at Jefferies, wrote in a note.

Tuesday, the International Energy Agency predicted that there would be a global glut of oil in 2025 due to a combination of abundant supply and persistently weak demand in China, the world's largest oil importer. This put further pressure on oil prices.

“Heightened oil supply security concerns are set against a backdrop of a global market that … looks adequately supplied,” the agency wrote in a report, noting “robust” increases in oil production in the US and other countries in the Americas. “Supply keeps flowing, and in the absence of a major disruption, the market is faced with a sizable surplus in the new year.”