Crude prices eased after OPEC+ announced another output hike from August, raising expectations of higher global supply.
Highlights:
• Brent crude fell to $71.70 per barrel
• WTI crude slipped to $68.44 per barrel
• OPEC+ to raise output targets by 188,000 barrels per day
• Gulf exports and Russian shipments are improving
• Traders remain cautious over Strait of Hormuz tensions
Oil prices moved lower on Monday after OPEC+ agreed to increase production targets from August, adding pressure on crude markets already facing signs of rising global supply.
Brent crude slipped 0.58% to $71.70 a barrel, while West Texas Intermediate fell 0.36% to $68.44 a barrel around 7:30 am IST. The fall came after OPEC+ decided to raise output targets by 188,000 barrels per day from August. This marks the fifth straight month of production increases by the oil-producing alliance.
The latest hike involves Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman. OPEC+ said it would continue monitoring market conditions and follow a cautious approach to support market stability.
However, analysts believe the actual supply increase may be lower than announced because some producers are still recovering from disruptions linked to the US-Iran conflict and shipping tensions around the Strait of Hormuz.
The reopening of Gulf export routes has also eased supply concerns. Commercial vessels have gradually resumed movement through the Strait of Hormuz after an interim understanding between the United States and Iran. Still, shipping volumes remain below pre-war levels.
Higher Russian crude exports have added to supply pressure. Russia’s western port shipments reportedly reached record levels in June after Ukrainian drone attacks damaged some refineries, pushing Moscow to export more crude.
For consumers and oil-importing countries like India, softer crude prices can offer some relief, especially on import bills and inflation pressure. However, retail fuel prices may not immediately change, as domestic pricing depends on taxes, exchange rates and oil marketing company decisions.
