Oil declines as OPEC+ goes ahead with September production hike

Oil prices declined on Monday after the OPEC+ alliance agreed to a substantial production increase for September, even as traders remained cautious amid the threat of additional US sanctions on Russia.

Brent crude futures dropped 85 cents, or 1.2%, to $68.82 a barrel by 08:46 GMT, while US West Texas Intermediate (WTI) crude fell 82 cents, also 1.2%, to $66.51 a barrel. Both benchmarks had closed nearly $2 lower on Friday.

The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, agreed on Sunday to boost oil output by 547,000 barrels per day in September. The move is part of a series of rapid supply increases aimed at reclaiming market share.

This step—largely anticipated by markets—marks a full and early reversal from the bloc’s largest tranche of production cuts, which had totaled around 2.5 million barrels per day, or roughly 2.4% of global demand.

Goldman Sachs analysts estimate that the actual increase in supply from the eight OPEC+ countries that have been ramping up output since March will reach about 1.7 million barrels per day, as other members have cut back after previously exceeding their quotas.

Meanwhile, investors continued to assess the impact of recent US tariffs on exports from dozens of trading partners.

Still, markets remained wary of potential new sanctions on Russia, after President Donald Trump threatened to impose 100% secondary tariffs on buyers of Russian crude oil in a bid to pressure Moscow into halting its war in Ukraine.

“Over the medium term, oil prices will be driven by a mix of tariffs and geopolitical factors. Any price spikes resulting from energy sanctions are likely to be temporary,” said Tamas Varga, an analyst at PVM.

Two trading sources said Friday, citing LSEG trade flow data, that at least two tankers carrying Russian oil bound for Indian refineries had been rerouted following the new US sanctions.

Analysts at ING wrote in a note that roughly 1.7 million barrels per day of crude supply could be at risk if Indian refiners cease purchases of Russian oil.

However, two Indian government sources told Reuters on Saturday that the country would continue buying oil from Russia despite Trump’s threats.