Kilduff: The bigger question from the Iran deal is how quickly countries can ramp up production

Summary

John Kilduff discusses the prospective Iran peace deal’s impact on energy markets, expecting crude oil prices to fall sharply as OPEC+ producers quickly ramp up supply and a glut returns. He also identifies refining margins as an attractive investment opportunity during the crude price readjustment.

• A peace deal with Iran is expected to be signed, easing Strait of Hormuz disruptions.
• Crude oil has already surrendered most of its war premium, falling from above $110 toward $80.
• Saudi Arabia, Kuwait, and Iraq are eager to ramp production and exports for petrodollar revenue.
• Kilduff sees oil quickly returning to the mid-$60s or even upper $50s per barrel.
• U.S. production and exports have also been rising, adding to potential oversupply.
• Refinery crack spreads and margins should hold up, making refiners an attractive investment.
• Qatar’s LNG infrastructure suffered damage, but U.S. LNG can fill the gap, preventing a supply crisis.