The global crude oil market is currently gripped by bearish sentiment. Citigroup's latest forecast indicates that as the geopolitical risk premium dissipates, Brent crude prices could drop further to $60 per barrel by the end of this year. This outlook reflects growing market concerns over supply surplus, with fundamental factors rapidly regaining dominance over market direction.

Conditions in key shipping lanes, previously a source of market tension, are improving. As the impact of disruptions in the Strait of Hormuz eases, shipping traffic is gradually returning to normal, and the physical crude market has weakened significantly. Inventory drawdowns are also far below expectations. Although initial normalization of shipping routes and adjustments in the insurance market may bring some volatility, and residual logistics bottlenecks still need to be gradually absorbed within the system, commercial operators generally believe the current risk environment has become manageable. The recovery of structured navigation patterns and rising traffic volumes serve as evidence.

Performance on the demand side is equally weak, with no significant recovery seen in China, one of the major buyers. Meanwhile, major European countries seem to have accepted the reality that vessels passing through key straits must pay fees to relevant parties, further pushing the energy market back to normality. The recovery on the supply side has exerted direct downward pressure on oil prices. As resumed passage boosts near-term supply, refineries have gained more crude sources, leading to a rapid price decline. The global benchmark Brent crude accumulated a drop of 30% in the second quarter, largely wiping out gains made during the conflict. As of the most recent trading week, Brent crude prices hovered around $72 per barrel, while the last time it fell below $60 was in January this year.

Meanwhile, other international investment banks hold similar views. Goldman Sachs believes that as the impact of the war fades, the market will shift towards oversupply. Morgan Stanley recently also downgraded its oil price forecast and warned of oversupply risks. Market strategy suggests investors sell on rallies, with the expected oil price range between $60 and $65 around the end of the year.