Saudi Arabia's latest price cut speaks to how fierce the battle for Asian market share has become. Yet even after slashing prices, Reuters reports, Saudi crude still costs more than spot cargoes readily available from rival suppliers.

　　As supply recovers while demand remains subdued, major producers are increasingly relying on price discounts to defend their positions in key Asian markets.

　　PEACE NOT YET PRICED IN

　　Fundamentals aside, geopolitics still holds the whip hand over oil prices.

　　After Washington and Tehran signed a memorandum of understanding, several international financial institutions trimmed their oil price forecasts, betting that supply risks have eased.

　　However, geopolitical uncertainty has proved to be persistent. The latest strikes between the United States and Iran have reinforced concerns that tensions could flare up at any time. As security conditions in the Gulf remain fragile, shipping through the Strait of Hormuz cannot be normalized in the near term.

　　Over the medium term, however, market fundamentals are expected to regain the upper hand. As Gulf oil exports continue to recover, OPEC+ gradually increases production and global demand remains subdued, oversupply pressures are likely to become more pronounced. As a result, oil prices will increasingly be driven by the balance between supply and demand rather than geopolitical risks.

　　Oslo-headquartered energy research and business intelligence company Rystad Energy has said in a recent report that although geopolitical tensions could periodically push oil prices higher, they are unlikely to alter the broader trend toward a well-supplied market over the medium term.

　　Goldman Sachs also expects continued OPEC+ production growth, combined with sluggish demand, to cap further gains in oil prices, while the geopolitical risk premium is likely to continue fading.