Oil Prices Dip as OPEC Boosts Output Amid Sanctions Fears
Oil Prices Fall as OPEC+ Increases Production
LONDON – Oil prices dropped slightly on Monday after OPEC+ decided to increase oil production.
Brent crude oil fell 40 cents to $69.27 per barrel, and U.S. West Texas Intermediate (WTI) dropped 37 cents to $66.96 per barrel. This came after both prices fell about $2 on Friday.
The OPEC+ group, which includes major oil-producing countries, said it will increase oil output by 547,000 barrels per day in September. This is part of a larger plan to bring back more oil to the market and regain market share. They said strong economic growth and low oil prices were the reasons.
This move is expected and means OPEC+ is fully reversing earlier production cuts. A special increase for the United Arab Emirates will also bring total added output to about 2.5 million barrels per day, or 2.4% of global demand.
However, experts at Goldman Sachs said only about 1.7 million barrels per day might reach the market. That’s because some countries in the group have already cut output after producing too much earlier.
Analysts believe OPEC+ may not raise output again after September, especially since non-OPEC countries are also increasing production.
RBC Capital Markets analyst Helima Croft said the market has handled the extra oil well so far, with prices still close to where they were before new tariffs.
Still, there are concerns. The U.S. may put more sanctions on Iran and Russia, which could affect oil supply. President Donald Trump has warned of 100% secondary tariffs on countries that buy Russian oil, trying to pressure Russia to end the war in Ukraine.
Two ships carrying Russian oil to India have already changed their destinations because of new U.S. sanctions. But Indian officials told Reuters they will continue to buy oil from Russia.
Another worry is that U.S. tariffs could hurt the global economy and reduce fuel demand, especially after U.S. job growth data on Friday was weaker than expected.
U.S. trade official Jamieson Greer said on Sunday that the new tariffs will stay in place for now, as talks continue.
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