LONDON: Global oil prices edged lower on Monday after the Organisation of the Petroleum Exporting Countries and its allies (Opec+) agreed to raise production targets again from August, while recovering crude exports through the Strait of Hormuz added to expectations of increased global supply.
Brent crude futures fell 24 cents, or 0.33%, to $71.88 per barrel, while US West Texas Intermediate (WTI) crude declined 11 cents to $68.58 per barrel. WTI did not settle on Friday because US markets were closed ahead of the Independence Day holiday.
The latest decline followed Sunday’s Opec+ decision to increase collective output targets by 188,000 barrels per day (bpd) beginning in August, extending similar production hikes implemented in June and July. The move reflects the group’s continued efforts to restore production after earlier supply disruptions.
Can Opec+ Deliver the Promised Output Increase?
Despite higher production quotas, analysts say the additional supply may not immediately reach global markets. Production across several Gulf producers—including Saudi Arabia, Kuwait and Iraq—was constrained during the recent US-Israel-Iran conflict, which disrupted tanker traffic through the Strait of Hormuz and limited exports.
IG market analyst Tony Sycamore said the latest production increase was broadly in line with market expectations but noted that many producers are still struggling to meet existing quotas as production gradually recovers from the conflict.
Are Gulf Oil Exports Returning to Normal?
Oil exports from Gulf producers have begun recovering following the easing of regional tensions. According to market data, Gulf crude exports increased by more than 3 million barrels in June compared with May, surpassing 10 million bpd. However, export volumes remain approximately 40% below pre-conflict levels, indicating that the recovery is still incomplete.
A Reuters survey also found that Opec’s overall crude production rose by 3.3 million bpd month-on-month in June to 19.43 million bpd, rebounding from its lowest level in more than two decades.
How Is Russia Affecting Global Oil Supply?
Russia is also adding to global crude availability. Oil shipments from its western ports reached a record high in June and are expected to remain elevated in July. Industry sources attribute the increase to damage sustained by Russian refineries in Ukrainian drone attacks, forcing Moscow to divert more crude to export markets.
What Are Markets Watching Next?
Investors continue to monitor the pace of Gulf export recovery, Opec+ production compliance, Russian crude shipments, and any renewed geopolitical risks involving Iran and the Strait of Hormuz. These factors are expected to play a key role in determining the direction of global oil prices in the coming weeks.