Oil prices moved within a narrow range at the start of Monday’s trading, as the market balanced two opposing forces. On one side, supply conditions continued to improve with higher OPEC+ output and a gradual recovery in Gulf crude exports. On the other side, geopolitical risks around the Strait of Hormuz remained firmly on traders’ radar.
West Texas Intermediate crude posted a marginal rise to 68.72 dollars per barrel, while Brent crude slipped to 71.97 dollars per barrel, reflecting the absence of a clear direction as fundamental drivers remained mixed.
The main pressure on prices came from the supply side after OPEC+ agreed to raise production targets by around 188 thousand barrels per day starting in August, as part of its gradual rollback of voluntary output cuts. Although the additional barrels have not fully reached the physical market yet, the decision strengthened expectations that supply will continue to recover in the coming period, especially as conditions in the Gulf move toward greater stability.
The recovery in crude exports through the Strait of Hormuz also helped ease concerns over shipping disruptions. Saudi Arabia restored exports to levels close to those seen before the escalation, while higher output from other Gulf producers reinforced expectations of a more flexible supply environment.
Still, the risk premium has not fully disappeared from the market. Mixed messages from Washington and Tehran over the future security and management of the Strait of Hormuz kept investors cautious, particularly as Iran maintained its influence over the strategic passage and rejected any conditions linked to shipping access.
This mix of stronger supply and political risk kept oil prices contained. Brent’s futures curve points to bearish pressure linked to expectations of a near term supply surplus, while tensions around Hormuz continue to limit any sharp downside move.
ANZ said the market is still assessing the impact of higher Gulf supply, especially after OPEC production rose by around 2.34 million barrels per day in June as exports through the Strait of Hormuz resumed. Although shipping activity has improved, ongoing security risks could make it harder to maintain higher export flows over the medium term.
At the same time, concerns over a global supply surplus are increasing, with lower Chinese crude imports, improving exports from major producers, and continued OPEC+ production increases all supporting expectations that supply growth could outpace demand in the second half of the year.
Markets are now waiting for official selling prices from Saudi Arabia and other Gulf producers, as these figures may offer clearer signals on regional demand. Investors will also continue to monitor whether recovering Gulf exports add further pressure on crude prices or whether geopolitical risks around the Strait of Hormuz keep the market supported.
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