Oil prices slip as OPEC+ output increase and recovering Gulf exports raise supply outlook

Global oil prices edged lower on Monday as investors assessed the impact of OPEC+’s latest decision to raise production targets and the gradual recovery of crude exports through the Strait of Hormuz

Global oil prices edged lower on Monday as investors assessed the impact of OPEC+’s latest decision to raise production targets and the gradual recovery of crude exports through the Strait of Hormuz, developments that are expected to improve global supply conditions in the coming weeks.

Brent crude futures declined by 24 cents, or 0.33%, to trade at $71.88 per barrel in early Monday trading after closing 0.45% higher in the previous session. Meanwhile, U.S. West Texas Intermediate (WTI) crude slipped 11 cents, or 0.16%, to $68.58 per barrel. There was no official settlement for WTI on Friday as U.S. financial markets remained closed ahead of the Independence Day holiday.

Despite modest movements at the start of the week, both benchmark contracts ended last week largely unchanged after experiencing sustained downward pressure in recent weeks. Market participants have remained focused on geopolitical developments in the Middle East, particularly negotiations involving the United States and Iran, as well as the pace of recovery in oil exports from the Gulf region.

A major factor influencing market sentiment was Sunday’s decision by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, to approve another increase in production targets beginning in August. The group agreed to raise output by 188,000 barrels per day (bpd), following similar production increases introduced for June and July.

Analysts noted that the latest increase was broadly in line with market expectations and therefore did not trigger a significant reaction in oil prices. However, many believe the announced production hikes may not immediately translate into substantial additional supply because several member countries are still struggling to restore output after recent regional disruptions.

During the recent conflict involving Iran, shipping through the Strait of Hormuz—a crucial route for global energy supplies—was severely affected, limiting exports from major Gulf producers such as Saudi Arabia, Kuwait, and Iraq. Although the conflict has eased, production and export operations are still gradually returning to normal levels.

Market analyst Tony Sycamore of IG said the production increase was largely expected and questioned its immediate impact, noting that some countries are still producing below their assigned quotas while recovering from earlier disruptions. He added that the announced quotas may have limited significance until production fully normalises across the region.

Meanwhile, Gulf producers have begun restoring oil supplies that were temporarily suspended during the conflict. Export volumes from the region have shown a noticeable recovery, providing additional confidence that global supply constraints are easing.

According to a Reuters survey, OPEC’s crude oil production increased by 3.3 million barrels per day in June compared with the previous month, reaching 19.43 million barrels per day. The rebound marked a significant recovery from output levels that had fallen to their lowest point in more than two decades due to conflict-related disruptions.

Trade data also indicated that Gulf oil exports surged by more than 3 million barrels per day in June compared with May, pushing total shipments above 10 million barrels per day. However, exports remain approximately 40 percent below the levels recorded before the outbreak of the regional conflict, highlighting that the recovery is still incomplete.

Adding further pressure to global oil prices, Russia has also boosted crude shipments. Industry sources reported that exports from Russia’s western ports reached record levels in June and are expected to remain elevated throughout July. The increase follows repeated Ukrainian drone attacks on Russian refineries, forcing Moscow to redirect more crude oil to international markets instead of domestic processing.