Oil Dips as Larger OPEC+ Supply Increase Raises Glut Concerns

07 Jul 2025

Riyadh -Maaal

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Oil pushed lower after OPEC+ agreed to a bigger-than-expected production increase next month, raising concerns about oversupply just as US tariffs fan fears about the demand outlook, Bloomberg reported.

Brent fell as much as 1.6% before clawing back some losses to trade near $68 a barrel. West Texas Intermediate was above $66. The group led by Saudi Arabia has decided to increase supply by 548,000 barrels a day, putting OPEC+ on track to unwind its most recent output cuts a year earlier than planned.

Alliance officials cited summer demand as one reason for their optimism that the extra barrels could be absorbed by the market, with the move answering President Donald Trump’s calls for lower fuel costs.

The oil market has been volatile in recent weeks following the conflict between Israel and Iran, with a fragile truce now in place and focus shifting to OPEC+ supply and US trade policy. Trump’s country-by-country tariffs will take effect Aug. 1, Commerce Secretary Howard Lutnick said, signaling some breathing room for trading partners ahead of a previous deadline of July 9.

OPEC+ previously announced hikes of 411,000 barrels a day for May, June and July — already three times faster than scheduled — and traders had expected the same amount for August. The increase amplifies a dramatic strategy pivot, from years of output restraint to reopening the taps to reclaim market share.