Oil Markets Are Pricing A Supply Surge That Isn’t Guaranteed

Crude oil prices are in freefall after the United States and Iran agreed on a ceasefire, set to last 60 days.

Traders expect the ceasefire to unleash an avalanche of crude, and indeed, tankers are leaving the Persian Gulf in growing numbers.

And yet Iran just struck a commercial ship in Hormuz.

Bloomberg reported earlier this week that the ceasefire prompted huge discounts in available crude cargoes, noting how Angolan crude was selling at a $10 discount to dated Brent—for the first time in a decade.

Not only this, but Chinese refiners were…