London (TDI): Global oil prices edged lower on Monday after OPEC+ agreed to increase its production targets for August, while a gradual recovery in crude exports from the Gulf and Russia added to expectations of improved global supply.
Brent crude futures slipped 24 cents, or 0.3 percent, to $71.88 per barrel, while US West Texas Intermediate (WTI) crude fell 11 cents to $68.58 per barrel in early trading. WTI did not settle on Friday because US markets were closed ahead of the Independence Day holiday.
Oil prices have remained relatively stable over the past week after experiencing a broader decline in recent weeks, as investors continued to monitor developments surrounding the Strait of Hormuz and the recovery of crude exports following the recent conflict involving Iran.
On Sunday, the Organization of the Petroleum Exporting Countries and its allies (OPEC+), led by Saudi Arabia and Russia, agreed to raise collective production targets by 188,000 barrels per day from August. The increase follows similar output adjustments announced for June and July.
Read More: Aramco Helicopter Crash at Saudi Oil Terminal Kills All 14 on Board
Despite the decision, analysts noted that actual production has yet to fully reflect the higher quotas due to disruptions caused by the recent conflict between Iran and Israel, which temporarily affected tanker traffic through the Strait of Hormuz, a vital route for oil exports from Saudi Arabia, Kuwait and Iraq.
Market analysts said the latest production increase was largely anticipated and is unlikely to have an immediate impact on global supplies, as several producers are still working to restore output following the disruption.
Meanwhile, Gulf producers have gradually resumed exports. A Reuters survey showed OPEC’s crude production increased by 3.3 million barrels per day in June to 19.43 million barrels per day, recovering from its lowest level in more than two decades.
Data also indicated that oil exports from Gulf countries rose by more than 3 million barrels in June compared with May, surpassing 10 million barrels per day. However, export volumes remain well below levels recorded before the regional conflict.
Read More: Oil Slips as Markets Await Signs of Normalization in Hormuz Traffic
At the same time, Russia has increased crude shipments from its western ports to record levels after repeated Ukrainian drone attacks damaged several domestic refineries, prompting Moscow to redirect more crude oil to international markets.
The combined recovery in Gulf exports and higher Russian shipments has reinforced expectations of increased global oil supplies, contributing to the modest decline in prices at the start of the trading week.
