LONDON, July 6 – Oil prices fell on Monday after OPEC+ agreed to increase crude production targets for August and exports through the Strait of Hormuz continued to recover, reinforcing expectations of higher global oil supplies.
Brent crude futures fell 41 cents, or 0.57%, to $71.71 per barrel, while U.S. West Texas Intermediate (WTI) crude declined 37 cents, or 0.54%, to $68.32 per barrel. There was no settlement for WTI on Friday as U.S. markets were closed ahead of the Independence Day holiday.
The decline follows several weeks of volatile trading as investors monitored developments surrounding the United States and Iran, particularly the security of shipping through the Strait of Hormuz, a critical route for global energy exports.
On Sunday, the Organization of the Petroleum Exporting Countries and its allies (OPEC+), including Russia, agreed to increase collective production targets by 188,000 barrels per day from August, following similar output increases implemented for June and July.
Although previous production increases were constrained by disruptions linked to the conflict involving Iran, the reopening of the Strait of Hormuz has enabled Gulf producers to gradually restore exports.
According to market data, Gulf oil exports rose by more than 3 million barrels in June compared with May, exceeding 10 million barrels per day. However, export volumes remain around 40% below pre-conflict levels, indicating that supply recovery is still underway.
Commenting on market conditions, PVM analyst Tamas Varga said producers are “selling into a falling market, offering little hope of an imminent price recovery.” He added that “lower oil prices will undoubtedly stimulate demand further down the line.”
Meanwhile, ANZ revised its demand outlook, forecasting that global oil demand will contract by 1.5 million barrels per day in 2026 following a sharper-than-expected slowdown during the second quarter.
The bank said “we now expect global oil demand to contract by 1.5 million barrels per day in 2026, reflecting a sharper-than-expected downturn in Q2, when year-on-year declines could reach 4 million bpd based on preliminary data.”
However, ANZ expects market conditions to improve later in the year, noting that “we expect demand losses to moderate in the second half of the year as supply improves and some deferred consumption returns.”
Adding to signs of increasing supply, the Abu Dhabi National Oil Company (ADNOC) sold approximately 16 million barrels of Emirati crude at wider discounts through its fifth spot tender since June, according to trade sources. The sale reflects growing spot market availability as regional exports continue to normalise.
The latest developments suggest global oil markets are shifting away from the geopolitical risk premium that supported prices earlier this year, with traders increasingly focusing on supply growth and softer demand prospects as the primary drivers of crude prices.
