Daijiworld Media Network - New Delhi
New Delhi, Jul 6: Global crude oil prices declined by nearly one per cent on Monday after the OPEC+ alliance agreed to increase oil production from August and exports through the Strait of Hormuz continued to recover, easing concerns over tight global supplies.
International benchmark Brent Crude fell 0.76 per cent, or 55 cents, to trade at $71.55 per barrel, while West Texas Intermediate (WTI) dropped almost one per cent, shedding 68 cents to trade below $69 per barrel.
The decline followed OPEC+'s decision to raise its production targets for August, signalling continued efforts by the producer alliance to restore output that had been voluntarily curtailed in 2023 to stabilise crude prices.
Under the revised plan, seven key oil-producing nations, led by Saudi Arabia and Russia, are expected to increase their combined production target by 188,000 barrels per day.
With the proposed hike, the cumulative increase in production quotas since OPEC+ began reversing its voluntary output cuts is expected to reach around 940,000 barrels per day, equivalent to roughly one per cent of global oil demand.
Oil prices also came under pressure as crude exports through the Strait of Hormuz continued to normalise. The key shipping route has seen improving export flows after geopolitical tensions in the region eased, allowing major Gulf producers to restore supply.
The improvement follows an interim understanding between the United States and Iran, which has reduced disruptions to energy shipments from the Gulf.
Meanwhile, Saudi Arabia and the United Arab Emirates have already restored their crude exports to levels close to those seen before the recent conflict, increasing the volume of oil available in international markets.
The return of additional supplies has contributed to a surplus in several Asian markets, reversing the sharp price gains recorded during the regional tensions and potentially intensifying competition among OPEC+ producers for market share.
Market analysts expect the August production increase to be the second-last phase of unwinding the voluntary production cuts introduced in 2023, with one final output increase likely in September to complete the restoration of the curtailed supply.