Oil prices trimmed part of their earlier losses on Monday but remained close to pre-Iran war levels.
Crude markets stayed under pressure as investors weighed the prospect of higher OPEC+ production and steady shipping activity through the Strait of Hormuz.
At 15:05 ET, Brent crude futures for September delivery slipped 0.1% to $72.03 per barrel. U.S. West Texas Intermediate crude futures for August delivery also fell 0.1% to $68.63 per barrel.
OPEC+ Raises Production Targets
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, agreed over the weekend to raise production targets by 188,000 barrels per day starting in August.
The move continues the group’s gradual rollback of voluntary output cuts.
Although much of the extra oil has not yet reached the market, the decision strengthened expectations that supply will keep recovering as Gulf conditions normalize.
Hormuz Shipping Traffic Remains Strong
Supply concerns also eased after shipping traffic through the Strait of Hormuz remained active over the weekend.
According to Kpler data, there were 108 verified vessel crossings through the key waterway between Friday and Sunday.
The Strait of Hormuz remains one of the world’s most important oil shipping routes. Any disruption there can quickly affect global crude prices.
Analysts See Renewed Supply Pressure
David Morrison, senior market analyst at Trade Nation, said the OPEC+ output increase should help the group move closer to its production targets.
He noted that earlier production increases had been limited by the previous blockage of the Strait of Hormuz.
Morrison also said some crude contracts are now trading near levels last seen before the war began in late February. This suggests that the earlier market dynamic of slowing global demand and strong supply may be returning.
However, he warned that crude looks heavily oversold on the daily MACD indicator. This could increase the risk of a sharp rebound if short sellers take profits or new buyers enter the market.
Stranded Gulf Vessels Begin Moving
Reuters also reported positive developments involving ships that had been stuck in the Gulf for months due to the closure of the Strait of Hormuz.
Citing LSEG shipping data, Reuters said a group of 10 Japan-linked vessels and a supertanker carrying Saudi crude for South Korea had exited the chokepoint.
Six of those ships were very large carriers loaded with around 12 million barrels of Middle Eastern crude. The supertanker heading to South Korea was carrying about 2 million barrels.
Iranian state media also reported that maritime trade between Iran and Qatar had resumed after being suspended for around five months.
Iran Mourns Former Supreme Leader
Iran’s focus remained on the funeral of former Supreme Leader Ayatollah Ali Khamenei, who was killed in strikes at the start of the war.
President Donald Trump said on Saturday that the U.S. had given Iran “a week off” for the funeral.
Iranian state media showed large crowds in Tehran for the funeral procession. Khamenei’s body is expected to travel to other cities in Iran and Iraq for further rites.
U.S.-Iran Tensions Still Create Uncertainty
Despite the recent interim peace agreement between the U.S. and Iran, traders remain cautious.
Oil prices have dropped back toward pre-war levels after Brent briefly climbed above $120 per barrel at the height of the conflict.
Still, Washington and Tehran continue to disagree over the future control and security of the Strait of Hormuz.
Iran wants to retain some control over the waterway, while the U.S. has rejected that position. The two sides also remain divided over Iran’s nuclear program and fighting involving Israel and Hezbollah militants in Lebanon.
U.S. Emergency Oil Stocks Hit 1983 Low
Outside the Middle East, U.S. government data showed another decline in emergency crude stockpiles.
The Department of Energy said crude inventories in the Strategic Petroleum Reserve fell by 6.2 million barrels in the week ending July 3.
That brought total SPR holdings down to 319.5 million barrels, the lowest level since May 1983.
The decline is part of the Trump administration’s agreement to release 172 million barrels over four months in an effort to limit oil price increases.
