Oil Prices Slide as Geopolitical Tensions Ease, OPEC+ Considers Output Hike

Oil prices fell by 1% on Monday amid easing geopolitical tensions in the Middle East and growing expectations of increased supply from OPEC+. Brent crude futures slipped 66 cents, or 0.97%, to $67.11 per barrel by 0031 GMT ahead of the August contract’s expiry, while the more active September contract dropped 83 cents to $65.97. U.S. West Texas Intermediate (WTI) crude declined by 94 cents, or 1.43%, to $64.58.

Despite the recent dip, both Brent and WTI are on track to close June with their second straight monthly gain of over 5%, although last week marked their steepest weekly losses since March 2023.

The decline follows the resolution of a 12-day conflict that began on June 13 when Israel attacked Iran’s nuclear sites, prompting U.S. airstrikes. Brent prices had surged past $80 during the height of the conflict but plunged after President Donald Trump brokered a ceasefire between Israel and Iran. Analysts, including IG Markets’ Tony Sycamore, noted the market has now largely priced out the geopolitical risk premium.

Adding to the bearish sentiment, four OPEC+ delegates revealed the group is likely to increase crude output by 411,000 barrels per day in August—continuing a pattern of monthly hikes that began in April. The next OPEC+ meeting is scheduled for July 6.

Meanwhile, in the U.S., oil rig counts—a key indicator of future production—fell by six to 432 last week, the lowest level since October 2021, according to Baker Hughes. This decline suggests potential constraints on domestic output even as global supply pressures mount.

The combination of supply-side optimism and reduced Middle East tensions is currently driving oil markets lower, shifting focus back to fundamentals.