The global foreign exchange and crude oil markets are undergoing a period of change. There is an unexpected risk that the Federal Reserve's policy will tighten more than expected, and the US dollar index is expected to strengthen in the short term. At the same time, the geopolitical conflict in the Middle East continues to ease, directly putting downward pressure on Brent crude oil prices. However, the recovery in China's crude oil import demand will effectively support oil prices, significantly limiting their downside potential and the magnitude of the decline. The geopolitical conflict in the Middle East, which had been disrupting the global energy market, has significantly cooled down, and the situation has eased, completely reversing the tense risk-averse sentiment in the oil market and directly leading to a sharp drop in Brent crude oil prices. Industry institutions predict that the global oil supply and demand pattern is about to reverse, and the oil market may officially return to a loose situation of oversupply as early as the end of 2026, completely bidding farewell to the supply shortage caused by the previous geopolitical crisis. It is worth noting that the traditional negative correlation between the US dollar and oil has completely collapsed, and the original trading logic of the market has been significantly restructured. After the news of the ceasefire agreement in the Middle East, Brent crude oil immediately plummeted, marking the largest single-day drop in nearly three months; subsequently, as the US released positive signals and expressed optimism about a breakthrough in the Iran nuclear negotiations, the geopolitical risk premium further subsided, and oil prices continued their weak downward trend. In previous market cycles, the decline in Brent crude oil prices usually directly suppressed the dollar's performance: lower oil prices suppress global inflation levels, weaken market expectations for sustained high inflation, and suppress market sentiment for continued interest rate hikes by the Federal Reserve, thereby dragging down the dollar. However, the current market environment is drastically different. Investors' core focus has completely shifted, with widespread concern that the Federal Reserve may break with established market expectations and introduce unexpected monetary tightening policies. According to real-time derivatives pricing data from the CME Group, the market's bet on the probability of the Fed implementing monetary policy tightening in July has risen to 38%, the highest level since September 2024. This fully reflects the significant increase in uncertainty surrounding the Fed's policy direction in the global financial markets, and the increasingly intense market speculation. If the Fed ultimately exceeds market expectations and implements tightening policies, it will provide new positive support for the dollar's performance, driving a new round of upward movement. Meanwhile, the continued easing of geopolitical tensions in the Middle East continues to exert significant downward pressure on Brent crude oil prices. A recent analysis report from Macquarie Bank points out that due to the political factors surrounding the upcoming US midterm elections, the pace of competition among various parties has accelerated, and this round of Middle East conflict is likely to end quickly within a few weeks, without a prolonged stalemate lasting for months. Based on this assessment, the bank made a clear prediction: the global crude oil market will experience a supply surplus of 2 million barrels per day as early as the fourth quarter of 2026, officially establishing a loose supply and demand situation; and the surplus gap will continue to widen, doubling in size by the first quarter of 2027, further exacerbating the market's looseness. Although crude oil shipping activity in the Strait of Hormuz remains sluggish and transport volume has not fully recovered, the Red Sea crude oil transport route remains open, with no large-scale shutdowns. Real-time statistics from shipping data analysis agency Kpler show that approximately 25 large oil tankers have recently passed through the Bab el-Mandeb Strait smoothly, indicating an overall stable energy transport supply chain. As long as the Houthi threat of maritime attacks remains merely a rhetoric and does not result in any substantial acts of sabotage, the risks to crude oil transport routes are manageable, and market risk aversion will continue to decline, gradually easing the pressure. In addition, the Caspian Pipeline Union's crude oil pipelines in the Black Sea have fully resumed normal operations, completely resolving previous market concerns about supply disruptions. These multiple positive factors have further contributed to the continued decline in Brent crude oil prices. Although short-term oil price movements are dominated by bearish forces, oil bulls have not completely retreated or abandoned their bullish logic, and are still holding their ground in the market. Data monitored by Barclays Bank shows that oil shipments through the Strait of Hormuz, a key shipping route, have shrunk dramatically, plummeting from 5.9 million barrels per day to 2.9 million barrels per day, effectively halving the capacity of the core supply corridor. Societe Generale also warned of risks, noting that approximately 4% of global oil supply continues to face potential risks such as geopolitical disturbances and transportation disruptions. Furthermore, institutional calculations show that every month the Middle East geopolitical conflict continues adds a $10/barrel geopolitical risk premium to Brent crude oil, providing long-term support for prices. These multiple supporting factors make it difficult for international oil prices to fall sharply and return to pre-conflict low levels. On the one hand, the current ceasefire agreement in the Middle East is unstable and fragile, and the geopolitical situation remains prone to recurrence, potentially disrupting the market again at any time. On the other hand, expectations for a recovery in Chinese crude oil demand continue to rise, with the market predicting a significant rebound in domestic crude oil imports from a ten-year low of 6.2 million barrels per day in June to 7.8 million barrels per day in July, indicating a substantial recovery in demand. Against the backdrop of a steady recovery in global crude oil consumption demand, even with continued easing of geopolitical conflicts in the Middle East and reduced supply-side pressure, strong demand support will continue to underpin Brent crude oil prices, keeping them at relatively high levels.