Seven countries in the OPEC+ alliance have agreed to lift their combined oil output by 188,000 barrels per day in August. Oil prices fell on Monday following the agreement to increase output targets and as exports from key producers via the Strait of Hormuz recover, returning prices to levels not seen since before the Iran war.
OPEC+ is extending its production increases as Gulf oil flows recover and prices cool, though fears of a global glut are mounting because supply is rising faster than demand. The physical oil market is currently flashing signs of weakness more extreme than any time since the demand collapse caused by Covid.
Amidst this surge of global supply and heightened competition for buyers, Saudi Arabia has cut the price of its main crude grade for customers in Asia for August. This price reduction is the most significant in at least 26 years, further contributing to the drop in oil prices.