Oil Prices Edge Higher as OPEC+ Opts for Modest Output Hike and Russia Supply Risks
Oil prices moved higher on Tuesday after OPEC+ announced a smaller-than-expected increase in production. The modest supply hike, combined with concerns over potential new sanctions on Russia, kept crude markets supported.
Brent crude rose 35 cents, or 0.53%, to $66.37 a barrel by 03:35 GMT, while U.S. West Texas Intermediate (WTI) climbed 32 cents, or 0.51%, to $62.58 a barrel.
OPEC+ Output Hike Lower Than Forecast
OPEC+ members agreed on Sunday to raise production by only 137,000 barrels per day starting in October. This is far less than the increases seen in recent months—555,000 bpd in September and August, and 411,000 bpd in July and June. Analysts had expected a stronger boost.
According to Daniel Hynes, senior commodity strategist at ANZ, this move reverses some of the production cuts initially scheduled to remain until 2026. The group has already been returning previously idled supply at a faster pace throughout this year.
Despite higher production, demand has failed to meet earlier forecasts. Analysts at Haitong Securities noted that the risk of oversupply remains a key factor driving oil markets in 2025.
Russia Sanctions Speculation Supports Oil
Oil prices also found support from geopolitical tensions. Concerns are rising that new sanctions could hit Russian energy exports after Moscow launched its largest air attack on Ukraine, setting fire to government buildings in Kyiv.
U.S. President Donald Trump signaled he was prepared to move forward with a second phase of restrictions, while EU officials visited Washington to coordinate the first joint transatlantic sanctions package since Trump’s return to office.
If sanctions tighten further, Russian crude supplies to global markets could fall, providing an additional boost to oil prices.
Fed Meeting in Focus
The upcoming Federal Reserve meeting also remains in focus. Markets currently see an 89.4% chance of a 25 basis-point rate cut. Lower interest rates can support global oil demand by reducing borrowing costs and stimulating economic activity.
