Despite a lull in peace talks progress between Iran and the United States, analysts have once again started to talk about oversupply as tankers leave the Persian Gulf in greater numbers than the past three months. Importing nations are even being warned of a “wave” of crude coming their way. Meanwhile, some are preparing for a future where Hormuz passage tolls are part of oil price formation.The latest to warn about a glut of crude oil was the Wall Street Journal, following reports from other major media outlets citing analysts as expecting the global oil market to swing from a sizable deficit to excess supply. OPEC’s latest production figures support the argument that supply is improving, although a glut prediction may be premature. Still, the group’s combined output rose by 3.3 million barrels daily last month from May, to hit 19.43 million barrels daily. That, however, is still far from pre-war production levels.Meanwhile, the United States broke another oil output record, pumping close to 14 million barrels daily, and the UAE was reported to be exporting all-time high volumes as it empties its storage tanks, filled to the brim during the war when Hormuz was closed. However, there is an important detail in the picture, and that detail is oil in storage. The Wall Street Journal reported earlier this month that global oil storage refilling was a big part of negotiations. Indeed, the publication cited U.S. Vice President J.D. Vance as saying that the two sides had inked a preliminary agreement to let countries “refill some stocks and then to see where the hand is.” Indeed, the less hasty analysts out there have noted that the recovering tanker traffic via the Strait of Hormuz can hardly be seen as a driver of an oil glut, given how many countries have had to dip into their oil storage, and dip deep, at that. This now has to be replenished.“The surge in oil supply is about to collide with a market that, at least for now, simply does not need it,” JP Morgan’s Natasha Kaneva said, as quoted by the Wall Street Journal, echoing remarks made by other analysts who believe the world needs less oil than it is currently getting. This is an interesting position given that just until about two weeks ago, analysts were pretty unanimous in their take on the war, recognizing demand destruction by high prices and expecting a deficit possibly extending into 2027 if the war dragged on long enough.ING analysts, unlike JP Morgan’s Kaneva, expect improved buying of crude ahead, driven by lower prices in recognition of the fundamental patterns governing oil markets. Cheap oil drives higher demand while expensive oil drives lower demand. Noting that despite recovering tanker flows out of the Persian Gulf, the U.S. was still releasing crude from the strategic petroleum reserve, Warren Patterson and Ewa Manthey wrote on Friday that “with the flat price falling and the forward curve moving into contango, we could start to see more buying in the market.”The price at which this buying will be taking place may well include a Hormuz pass toll, to be paid to both Iran and Oman, Bloomberg reported earlier this month, citing some European countries that were preparing for just that eventuality. According to the report, the view that Iran and Oman will be asking toll payments for tankers was also shared by some officials from the Gulf Arab states, but only privately.The official position of the Gulf states and the United States is that maritime laws would not allow this, and that if Iran or both Iran and Oman go ahead with the tolls, this would set a precedent for other countries with critical waterways in their maritime territory. Oil buyers from the European Union, however, are particularly worried about the possibility of tolls for Hormuz, suggesting that even after such a deep drop in oil prices from peak wartime levels, oil is not yet cheap enough for some importers, not to mention the next price jump whenever it may occur, as happens in cyclical industries.For now, however, everyone appears to be focused on keeping prices as low as possible. OPEC is boosting production to make up for three months or more of lost export revenues, the United States is trying to lower prices at the pump even further, and importing nations are refilling their storage. After fears about recession and bankrupt airlines, some relief has been provided to the global economy. It is uncertain whether this relief is permanent, and it would be wise to bear this in mind.”“Coming off the U.S. long weekend, traders are sitting tight and waiting to see whether U.S.-Iran relations will be cordial or volatile this week,” KCM Trade chief analyst Tim Waterer told Reuters earlier today. That is some sound advice, even coming on the heels of news that OPEC agreed to boost production further in August.By Irina Slav for Oilprice.comMore Top Reads From Oilprice.comTrump Targets California Again In SpaceX FeudColombia's Oil and Gas Reserves Keep ShrinkingLargest Data Center Project Ever Proposed Is Officially Dead