Oil prices fall amid OPEC+ production increase in September

Oil prices fell on Monday after OPEC+ agreed to another significant increase in production in September, which contributed to an increase in supply, but fears about disruptions in the supply of Russian oil to a large importer, India, limited losses, UNN reports with reference to Reuters.

DetailsBrent crude futures fell 18 cents, or 0.26%, to $69.49 a barrel by 04:56 GMT (07:56 Kyiv time), while US West Texas Intermediate crude traded 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 its allies (OPEC+) on Sunday agreed to increase oil production by 547,000 barrels per day in September, another step in a series of accelerated production growth rates to regain market share. The organization cited a healthy economy and low inventory levels as reasons for its decision.

The move, which is in line with market expectations, marks a full and prompt reversal of OPEC+’s largest round of production cuts, as well as a separate increase in production in the United Arab Emirates of approximately 2.5 million barrels per day, or about 2.4% of global demand.

Goldman Sachs analysts expect the actual supply increase from the eight OPEC+ countries that have increased production since March to be 1.7 million barrels per day, as other members of the group have cut production after overproduction.

“While OPEC+’s policy remains flexible and the geopolitical outlook uncertain, we assume that OPEC+ will keep the necessary production unchanged after September,” the analytical note says, adding that production growth in non-OPEC countries is unlikely to leave room for additional barrels.

RBC Capital Markets analyst Helima Croft noted: “The bet that the market would be able to absorb additional barrels seems to have paid off for the owners of spare capacity this summer, as prices are not that far from the level that existed before the introduction of tariffs on ‘liberation day’.”

Nevertheless, investors are still concerned about further US sanctions against Iran and Russia, which could lead to supply disruptions. US President Donald Trump has threatened to impose 100% secondary tariffs on buyers of Russian oil in an attempt to pressure Moscow to end the war in Ukraine.

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At least two vessels carrying Russian oil destined for refineries in India were redirected to other destinations after new US sanctions were imposed, trade sources said on Friday and LSEG trade flows showed.

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This jeopardizes the supply of about 1.7 million barrels of oil per day if Indian refineries stop buying Russian oil, ING analysts led by Warren Patterson note.

This could potentially negate the expected surplus in the fourth quarter and in 2026 and give OPEC+ the opportunity to start phasing out the next round of supply cuts of 1.66 million barrels per day, they added.

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

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The market is also concerned about the impact of US tariffs on global economic growth and fuel consumption, especially after US economic data on employment growth released on Friday was lower than expected.

US Trade Representative Jamison Greer said on Sunday that the tariffs imposed last week on dozens of countries are likely to remain in place rather than be reduced as part of negotiations.

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