OPEC+ agreed to raise August output by 188,000 barrels a day, its fifth straight monthly increase, and oil opened lower on the news. Brent held below $72 as an Iran-US truce eased Strait of Hormuz disruptions, though tanker traffic through the waterway stays below pre-war levels.
Seven OPEC+ producers agreed to raise August output by a combined 188,000 barrels a day, the group said on Sunday, and oil opened lower as the added barrels met a market already softening. The increase marks the fifth consecutive month the alliance has lifted its quotas, pushing more crude toward buyers just as prices retreat.
Brent crude, the international benchmark, traded below $72 a barrel shortly after commodities trading opened on Sunday night. The countries behind the decision are Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman. In their statement, the producers said they "reaffirmed the importance of adopting a cautious approach".
Why prices keep falling
Prices have kept sliding as Iran and the US work toward a final peace agreement following an interim deal that eased disruptions in the Strait of Hormuz. Crude now sits close to levels seen before the war between Iran and the US and Israel, as market optimism pulled prices lower both before and after the two sides reached their interim deal.
Under a broader memorandum of understanding, Iran agreed to let ships pass unimpeded through Hormuz while the US agreed to end its blockade of Iran's ports. More commercial vessels have since moved through the strait, which before the war carried roughly a fifth of the world's oil.
Hormuz risk lingers
Traffic still runs below pre-war levels, and the strait remains a source of tension. Iran's joint military command warned as recently as Thursday that all oil tankers using the waterway must follow its approved routes or face a "forceful response".
The war triggered an energy crisis across much of the world, and the modest output rises OPEC+ pledged in recent months could not offset the hit while most Hormuz shipping was blocked. S&P Global Energy said in a recent estimate that it did not expect Gulf oil production to recover fully until at least Q1 2027, while energy experts warned that fuel prices and consumer-goods costs were likely to stay high long after the conflict ends.
Sources: Bloomberg (snippet-based), India Today
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