US-Iran Deal Stirs Inflation Fears After China Kept Oil in Check

The US-Iran deal is setting the stage for a recovery in Chinese oil demand that risks driving up global inflation pressures, according to Bloomberg Economics, assuming the agreement holds and eventually restores energy flows to the world’s second-biggest economy.

“Throughout the conflict, China has effectively acted as a shock absorber for global energy markets, with its sharp drop in crude imports helping dampen oil price pressures during one of the most severe supply squeezes on record,” Bloomberg economists Chang Shu and David Qu wrote in a note on Monday.

“Any recovery in Chinese oil demand — particularly if energy flows ...