Geopolitics and geoeconomics are pounding down on the oil market, and the price seems to have no place to hide.

The latest barrage comes this week from the re-entry of sanctioned Iranian oil to the world market, triggered by Tehran’s compliance with the nuclear agreement. The lifting of sanctions, originally expected to happen in March or April, was sped up to bolster support for President Rouhani in Iran’s upcoming parliamentary elections. As a result, the returning oil will arrive in an already glutted market at a time of maximum seasonal weakness — and when geoeconomic pressures are mounting.

Oil prices are within hailing distance of where they were at the end of 2003, before China’s economic take-off ignited the so-called commodity “supercycle”, which drove up the prices of oil and other commodities. But the China of 10 per cent annual growth is no more. The question that now haunts the oil market is whether what we are seeing is China’s transition from an industrial to a consumer and services-oriented economy, or whether there are deeper structural problems that mean slower growth and more turbulence of the kind recently seen in the Chinese stock market. The significance for the global economy is enormous, and a weaker world economy means less growth in demand for oil at a time when world supplies are swelling.