Oil prices traded in a subdued range on Monday as markets weighed expectations for higher OPEC+ production against ongoing geopolitical uncertainty around the Strait of Hormuz.
At 01:37 ET, or 05:37 GMT, WTI crude futures edged up 0.04% to $68.72 a barrel. Brent crude futures slipped 0.21% to $71.97 a barrel.
Oil Market Faces Mixed Signals
The latest price action reflects two opposing forces in the oil market.
On one side, recovering Gulf crude exports and higher OPEC+ output point to a better-supplied market. On the other, uncertainty over future arrangements for the Strait of Hormuz continues to limit risk appetite.
ANZ said Brent’s futures curve remains in a bearish contango structure. This means near-term prices are trading below longer-dated contracts, often signalling expectations of short-term oversupply.
OPEC+ Supply Recovery Gains Momentum
OPEC+ agreed over the weekend to raise production targets by 188,000 barrels per day from August. The move extends the group’s gradual rollback of voluntary output cuts.
Although much of the extra supply has not yet reached the market, the decision supports expectations that oil supply will continue to recover as conditions in the Persian Gulf normalize.
Crude exports through the Strait of Hormuz have also improved in recent weeks. This has eased fears of prolonged shipping disruptions.
Saudi Arabia has restored exports close to pre-conflict levels, while higher production from other Gulf producers has strengthened expectations of a looser crude market.
Strait of Hormuz Risks Remain
Despite the recovery in physical supply, geopolitical risks around the Strait of Hormuz remain a key focus for traders.
Markets are watching conflicting signals from Washington and Tehran over the future security and governance of the strategic waterway.
U.S. President Donald Trump said Iran had agreed to “just about everything we need.” However, Iranian officials have said Tehran will not give up its influence over the passage or accept conditions linked to shipping access.
This mixed messaging has kept uncertainty high. It has also helped limit further downside in crude prices, even as Saudi Arabia, the UAE, and other Gulf producers continue restoring exports through Hormuz.
Oversupply Concerns Pressure Crude
ANZ said crude prices were broadly steady last week as markets assessed rising Gulf supplies.
The bank noted that OPEC production increased by 2.34 million barrels per day in June as exports resumed through the Strait of Hormuz.
However, ANZ also warned that security risks remain. This could make it harder to sustain higher export flows over the medium term.
Demand Outlook Remains Uncertain
Traders are increasingly focused on the risk of a global supply surplus.
Lower Chinese crude imports, improving exports from major producers, and continued OPEC+ production increases have all reinforced concerns that supply growth could outpace demand in the second half of the year.
Markets are now waiting for official selling prices from Saudi Arabia and other Gulf producers. These prices could provide fresh clues about regional demand.
Investors will also watch whether recovering exports continue to pressure crude prices in the coming sessions.
