Oil Prices Return Near Pre-Conflict Levels as ING Questions Supply Recovery Outlook

VG Markets · 2026-06-30T09:24:28Z
Oil Prices Return Near Pre-Conflict Levels as ING Questions Supply Recovery Outlook

Oil prices have returned to levels seen before the recent conflict, although ING strategists Michiel Tukker and Benjamin Schroeder suggest markets may be assuming a faster and more durable supply recovery than current conditions ultimately support.

Supply and Demand Dynamics Remain in Focus

According to ING, the recent decline in oil prices reflects, in part, a temporary imbalance between supply and demand rather than what the firm describes as a sustained market rebalancing. Physical buyers have remained relatively cautious while strategic petroleum reserves have continued to add supply to the market.

ING notes that this situation may not be sustainable over the longer term. The firm suggests that physical buyers may eventually need to return to secure supply, while strategic reserves could also require replenishment over time. Together, these factors could contribute to renewed upward pressure on oil prices.

Near-Term Risks Remain

Although oil prices have stabilized near levels seen before the recent conflict, ING believes supply-side risks remain present. According to the report, shifts in the current supply-demand balance could contribute to higher prices in the weeks ahead, even if market conditions currently appear relatively stable.

Inflation Outlook Remains Uncertain

ING also noted that the broader inflation implications of recent oil price movements may not become clearer until later this year. In particular, the firm highlighted uncertainty surrounding so-called "second-round effects" on core inflation, suggesting that both the future path of oil prices and their impact on inflation expectations remain uncertain.

Market Perspective

From a market perspective, developments in oil supply, strategic petroleum reserves and physical demand are likely to remain important factors for energy markets in the coming months. According to ING, changes in these areas could contribute to higher price volatility as market participants continue to assess supply conditions and the potential implications for inflation and monetary policy.