Oxford Economics: U.S.-Iran Deal Lowers Risk of Energy-Price Spike and Recession

Oxford Economics said a U.S.-Iran deal has reduced the risk that falling oil inventories could trigger a surge in global energy prices and lead to a recession, though further disruptions remain possible. According to Jin10, Oxford Economics analysts Ben May and Bridget Payne wrote in a report that the agreement does not automatically mean oil flows through the Strait of Hormuz will increase faster than previously expected. They said they had already assumed shipping through the Strait of Hormuz would resume by late July, and added that their near-term oil price forecasts still appeared too high. The analysts said reopening the Strait of Hormuz was likely to help ease inflation but would provide limited support to economic growth. They added that this reinforced their view that the U.S. Federal Reserve and the Bank of England would not raise interest rates, and that other central banks that have already finished tightening would not resume rate hikes.