Oil prices fell on Monday, August 4, 2025, after OPEC+ agreed to another large production hike in September,
Brent crude futures fell 18 cents, or 0.26%, to $69.49 a barrel by 0456 GMT, while U.S. West Texas Intermediate crude was at $67.21 a barrel, down 12 cents, or 0.18%, after both contracts closed about $2 a barrel lower on Friday.
The Organization of the Petroleum Exporting Countries and their allies, known as 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.
It cited a healthy economy and low stockpiles as reasons behind its decision.
The move, in line with market expectations, 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.
Analysts at Goldman Sachs expect that the actual increase in supply from the eight OPEC+ countries that have raised output since March will be 1.7 million bpd, because other members of the group have cut output after previously overproducing.
“While OPEC+ policy remains flexible and the geopolitical outlook uncertain, we assume that OPEC+ keeps required production unchanged after September,” they said in a note, adding that growth in non-OPEC output would likely leave little room for extra OPEC+ barrels.
OPEC+ agrees to raise oil output in September
RBC Capital Markets analyst Helima Croft said: “The bet that the market could absorb the additional barrels seems to have paid off for the holders of spare capacity this summer, with prices not that far off from pre-tariff Liberation Day levels.”
Still, investors remain wary of further United States sanctions on Iran and Russia that could disrupt supplies. U.S. President Donald Trump has threatened to impose 100% secondary tariffs on Russian crude buyers as he seeks to pressure Moscow into halting its war in Ukraine.
At least two vessels loaded with Russian oil bound for refiners in India have diverted to other destinations following new U.S. sanctions, trade sources said on Friday and LSEG trade flows showed.
This puts about 1.7 million bpd of crude supply at risk if Indian refiners stop buying Russian oil, ING analysts led by Warren Patterson said in a note.
This would potentially erase the expected surplus through the fourth quarter and 2026 and provide OPEC+ the opportunity to start unwinding the next tranche of supply cuts totalling 1.66 million bpd, they added.
However, two Indian government sources told Reuters on Saturday the country will keep purchasing oil from Russia despite Trump’s threats.
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