Economist: US-Iran agreement reduces recession risk but does not change outlook expectations

According to Odaily, Ben May and Bridget Payne from Oxford Economics stated in a report that although there may still be setbacks in the future, the US-Iran agreement has reduced the risk of continuously declining oil inventories eventually triggering a surge in global energy prices and leading to an economic recession. However, they noted that this does not automatically mean the volume of oil passing through the Strait of Hormuz will increase faster than previously expected. "We had already assumed that shipping through the Strait of Hormuz would resume by the end of July."

Nevertheless, they added, "our current short-term oil price forecast still appears to be too high." They further pointed out that although the reopening of the Strait of Hormuz is likely to help reduce inflation, its boost to economic growth is limited. As a result, this news further reinforces their view that the Federal Reserve and the Bank of England will not raise interest rates, and that other central banks which have already completed rate hikes will not raise them again. (Golden Ten Data)