Oil Prices Rise Ahead of OPEC+ Meeting as Supply Risks Loom
Oil prices gained on Tuesday as traders awaited the upcoming OPEC+ meeting on Sunday. Analysts expect the group to maintain its current voluntary production cuts, with no major supply changes.
Brent crude rose 72 cents, or 1.06%, to $68.87 a barrel by 11:07 a.m. EDT (1507 GMT). U.S. West Texas Intermediate (WTI) crude climbed $1.33, or 2.08%, to $65.34 a barrel. WTI futures had not settled on Monday due to the U.S. Labor Day holiday.
OPEC+ Policy Outlook
Eight members of OPEC+, including Saudi Arabia and Russia, will meet on September 7. Market watchers believe the alliance will keep voluntary cuts in place, helping stabilize prices near the $60 level. Independent analyst Gaurav Sharma noted that OPEC+ may wait until after the U.S. summer driving season before making adjustments, given the likelihood of a supply surplus later this year.
Geopolitical Developments Support Oil
Saudi Aramco and Iraq’s state oil company have halted crude sales to India’s Nayara Energy following EU sanctions in July on the Russian-backed refiner. Analysts warn this could tighten non-sanctioned supply, limiting options for buyers and supporting prices.
At the same time, the Shanghai Cooperation Organisation summit, attended by China’s Xi Jinping and Russia’s Vladimir Putin, highlighted calls for a “new global order” focused on the Global South. Analysts suggested this could push U.S. President Donald Trump to impose secondary sanctions, particularly targeting India, which may further support oil markets.
U.S. and India Trade Tensions
India’s trade minister Piyush Goyal confirmed that New Delhi is in talks with Washington for a bilateral trade deal. This comes after the U.S. doubled tariffs on Indian goods in response to its continued imports of Russian crude.
Markets also expect U.S. data to show another decline in crude inventories, boosting sentiment. The end of the summer driving season, marked by Labor Day, closed the peak demand period in the U.S., the world’s largest fuel market.
Supply Risks in Russia and Kazakhstan
Ukrainian drone strikes have disabled facilities representing about 17% of Russia’s refining capacity, equal to 1.1 million barrels per day, according to Reuters.
Meanwhile, Kazakhstan’s crude oil production, excluding condensates, rose 2% in August to 1.88 million barrels per day from 1.84 million in July.
