Macquarie Ltd analysts suggest oil markets may face a surplus before year-end, driven by increasing U.S. pressure to resolve the Iran conflict. With fewer than 100 days until the midterm elections, a potential deal could significantly impact global oil supply dynamics.

This outlook hinges on the U.S. administration's decision regarding sanctions relief for Iran, which could allow Iranian crude to re-enter the market. Such a development would challenge the current market balance, potentially reversing recent price gains and leading to an oversupply scenario.

The timing of any agreement, particularly with the upcoming elections, adds a layer of complexity. Macquarie's analysis highlights the delicate equilibrium of the oil market and the geopolitical factors that can quickly shift supply expectations. The firm's view suggests a bearish tilt in the near-term outlook if diplomatic progress accelerates.