Oil prices experienced a slight decline on Monday following OPEC+’s decision to raise its output targets starting in August. Concurrently, exports from major producers through the Strait of Hormuz are on the rise, which may contribute to an increase in global supplies. Brent crude futures decreased by 24 cents, or 0.33%, to $71.88 a barrel by 0010, following a 0.45% increase on Friday. U.S. West Texas Intermediate crude was priced at $68.58 a barrel, reflecting a decrease of 11 cents, or 0.16%. Notably, there was no settlement for WTI on Friday due to the closure of U.S. markets in observance of the Independence Day holiday on Saturday. Both contracts exhibited minimal fluctuations last week, following a trend of decline over the preceding weeks.

Investors remained vigilant regarding discussions between the United States and Iran concerning the implications for shipping through the Strait of Hormuz, while also monitoring the recovery of Gulf oil exports. The Organization of the Petroleum Exporting Countries and their allies including Russia reached an agreement on Sunday to raise output targets by an additional 188,000 barrels per day starting in August, following similar increases implemented in June and July. However, the increase has remained largely theoretical due to the U.S.-Israeli conflict with Iran, which has effectively shut the Strait of Hormuz to tanker traffic for major OPEC producers, including Saudi Arabia, Kuwait, and Iraq, thereby limiting their output. “The number was largely in line with expectation,” analyst Tony Sycamore said.

“With UAE leaving and when quotas are probably still not being met due to production still ramping up after the conflict – I’m not sure they mean much at the moment.” The United Arab Emirates has exited OPEC effective May 1. Gulf members have initiated the resumption of supplies that were halted during the Iran war and are enhancing their export activities. OPEC oil output in June increased by 3.3 million barrels per day month-on-month to 19.43 million bpd, according to a survey, marking a recovery from its lowest levels in over two decades.

In June, Gulf oil exports surged by over 3 million barrels compared to May, surpassing the 10 million barrels per day mark. However, this volume still lags 40% behind pre-war levels, according to the data. Furthermore, oil shipments from Russia’s western ports reached a record high in June and are anticipated to sustain that level in July, as drone attacks by Ukraine have inflicted damage on its refineries, compelling Moscow to increase crude exports, according to industry sources.