Oil prices dropped significantly during Asian trading hours on Monday after OPEC+ revealed plans to raise production by more than anticipated for August, sparking worries about a potential glut in the market.
By 21:06 ET (01:06 GMT), September Brent crude futures slipped 1.1% to $67.50 per barrel, while West Texas Intermediate (WTI) futures tumbled 2.1% to $65.59 per barrel. Both contracts had recovered 1-2% last week after steep declines in late June.
OPEC+ Boosts Output Beyond Forecasts
The OPEC+ coalition announced an output increase of 548,000 barrels per day for August, surpassing analyst predictions and eclipsing previous monthly increments of 411,000 barrels per day implemented in May, June, and July — each already exceeding initial cutback plans threefold. Additionally, the group hinted at another possible rise of 548,000 barrels per day in September.
This steady rollback of the 2.2 million barrels per day voluntary production cuts led by major oil producers such as Saudi Arabia and Russia marks a strategic move away from propping up prices toward protecting market share. Analysts from ING suggest that these larger supply boosts may further swell the oil surplus later this year, exerting additional downward pressure on prices.
U.S. Tariff Deadline Extended to August 1
This development comes amid broader global economic uncertainties, including worries about China’s economic growth and shifts in U.S. trade policies. President Donald Trump recently postponed the deadline for implementing new tariffs from July 9 to August 1, injecting further unpredictability into the trade landscape. Concerns remain that escalating trade barriers could hinder economic momentum and dampen demand for energy products.