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Oil prices slipped in early Asian trade on Monday after OPEC+ agreed to another large production hike in September.
Brent crude futures fell 43 cents, or 0.62%, to $69.24 a barrel by 2218 GMT while U.S. West Texas Intermediate crude was at $66.94 a barrel, down 39 cents, or 0.58%, after both contracts closed about $2 a barrel lower on Friday.
OPEC+ agreed on Sunday to raise oil production by 547,000 barrels per day for September, the latest in a series of accelerated output hikes to regain market share, as concerns mount over potential supply disruptions linked to Russia.
The move marks a full and early reversal of OPEC+’s largest tranche of output cuts plus a separate increase in output for the United Arab Emirates amounting to about 2.5 million bpd, or about 2.4% of world demand.
Eight OPEC+ members held a brief virtual meeting, amid increasing U.S. pressure on India to halt Russian oil purchases — part of Washington’s efforts to bring Moscow to the negotiating table for a peace deal with Ukraine. President Donald Trump said he wants this by August 8.
In a statement following the meeting, OPEC+ cited a healthy economy and low stocks as reasons behind its decision.
“Given fairly strong oil prices at around $70, it does give OPEC+ some confidence about market fundamentals,” said Amrita Sen, co-founder of Energy Aspects, adding that the market structure was also indicating tight stocks.
The eight countries are scheduled to meet again on Sept. 7, when they may consider reinstating another layer of output cuts totaling around 1.65 million bpd, two OPEC+ sources said following Sunday’s meeting. Those cuts are currently in place until the end of next year.
OPEC+ in full includes 10 non-OPEC oil-producing countries, most notably Russia and Kazakhstan.
The group, which pumps about half of the world’s oil, had been curtailing production for several years to support oil prices. It reversed course this year in a bid to regain market share, spurred in part by calls from Trump for OPEC to ramp up production.
The eight began raising output in April with a modest hike of 138,000 bpd, followed by larger-than-planned hikes of 411,000 bpd in May, June and July, 548,000 bpd in August, and now 547,000 bpd for September.
“So far the market has been able to absorb very well those additional barrels also due to stockpiling activity in China,” said Giovanni Staunovo of UBS. “All eyes will now shift on the Trump decision on Russia this Friday.”
As well as the voluntary cut of about 1.65 million bpd from the eight members, OPEC+ still has a 2-million-bpd cut across all members, which also expires at the end of 2026.
“OPEC+ has passed the first test,” said Jorge Leon of Rystad Energy and a former OPEC official, as it has fully reversed its largest cut without crashing prices.
“But the next task will be even harder: deciding if and when to unwind the remaining 1.66 million barrels, all while navigating geopolitical tension and preserving cohesion.”
