Global crude oil prices fell by up to one percent following OPEC+’s decision to raise production targets for August. The alliance's agreement to add output signals a gradual easing of the supply restrictions that have supported oil prices since 2023.
Brent crude slipped below $72 per barrel, dropping 0.76 percent to $71.55, while U.S. West Texas Intermediate (WTI) fell nearly 1 percent to just under $69. This decline comes amid a recovery in crude exports through the Strait of Hormuz, a critical shipping route that had faced disruption due to regional geopolitical tensions.
Under the new plan, major producers including Saudi Arabia and Russia will collectively increase output by 188,000 barrels per day in August. This addition continues the rollback of voluntary production cuts introduced in 2023, bringing total supply increases since the start of the unwind process to approximately 940,000 barrels daily—roughly equivalent to 1 percent of global oil demand.
The improved flow of exports through the Strait of Hormuz reflects an easing of tensions following an interim agreement between the United States and Iran. Gulf producers, particularly Saudi Arabia and the United Arab Emirates, have restored exports to levels close to those before the recent conflict, thereby increasing crude availability on international markets.
This resurgence of supply has led to a surplus in key Asian markets, reversing prior price spikes that occurred during regional conflicts. The additional volumes raise the potential for heightened competition among OPEC producers as they vie for market share amid shifting demand patterns.
The upcoming increase is expected to be the second-to-last phase in fully reversing the 2023 production cuts, with a final adjustment anticipated in September to complete the rollback.