Imen Ben Youssef | Afp | Getty Images<\/p>\n
Oil prices declined Thursday after President\u00a0Donald Trump<\/a> reportedly<\/a> signed \u200ba deal \u200bwith his Iranian counterpart Masoud Pezeshkian to end the \u200bwar in the Middle East, while the International Energy Agency flagged a supply glut next year.<\/p>\n International benchmark\u00a0Brent\u00a0crude<\/a>\u00a0futures for August dropped 1.13% to $78.65 a barrel. U.S.\u00a0West Texas Intermediate\u00a0futures<\/a>\u00a0for July fell 1.26% to $75.82 per barrel.<\/p>\n Clouding the situation, Trump also told reporters that he could resume attacks on Iran if Tehran failed to honor its commitments, according to Reuters. <\/p>\n “We’re going to bomb the hell out of them if they violate the agreement,” Trump reportedly said at a press conference. “I don’t want them to. I want them to honor the agreement.” <\/p>\n The IEA expects<\/a> a lasting resolution to the conflict will result in significantly higher supply volumes and spark a major oil overhang next year. <\/p>\n Global supply is now expected to drop by 3.9 million barrels per day on average in 2026 to 102.4 mbd, before recovering to 110.3 mb\/d next year, according to its latest monthly oil market report. <\/p>\n “Our first look at 2027 balances shows a significant overhang emerging next year,” the IEA added. <\/p>\n While lower oil prices may reduce chances of energy prices leading to a broader inflation problem, this is not “an all-clear,” according to a report by New York Life Investment Management. “Oil remains above pre-conflict levels, shipping normalization will take time, and inventories and strategic reserves still need to be replenished,” the report noted. <\/p>\n \u2014CNBC’s Hugh Leask<\/a> contributed to the report. <\/p>\n