Oil Prices Edge Higher as Market Braces for OPEC+ Output Hike and Russian Supply Uncertainty

Oil prices rose modestly on Monday, recovering from earlier losses, as traders appeared confident that global markets would absorb a planned production increase by OPEC+ in September. Ongoing concerns over potential disruptions in Russian crude shipments to India also lent support to prices.

Brent crude futures were up 11 cents, or 0.16%, trading at $69.78 per barrel by 8:47 a.m. Saudi time. U.S. West Texas Intermediate (WTI) crude rose 19 cents, or 0.28%, to $67.52 a barrel. Both benchmarks had fallen by around $2 per barrel at the close of trading on Friday.

The Organization of the Petroleum Exporting Countries and its allies (OPEC+) announced on Sunday that it will raise output by 547,000 barrels per day (bpd) in September, continuing a series of hikes aimed at regaining lost market share. The group cited strong economic fundamentals and declining stockpiles as justification for the move.

The output increase, largely anticipated by the market, includes additional volumes from the UAE and represents the early reversal of the bloc’s largest production cuts. Combined, the hikes equate to approximately 2.5 million bpd—roughly 2.4% of global oil demand.

Despite the substantial increase, market reaction remained muted. “This additional production appears to have little impact because it was so well flagged ahead of time,” said Michael McCarthy, CEO of online trading platform Moomoo Australia. He noted that markets likely focused more on reassurances from OPEC producers that previous supply additions had been smoothly absorbed, especially across Asian markets.

Analysts at Goldman Sachs estimate that the actual increase will be closer to 1.7 million bpd, factoring in offsetting cuts by OPEC+ members that had previously exceeded production limits.

Meanwhile, geopolitical risks are weighing heavily on market sentiment. U.S. President Donald Trump has threatened 100% secondary tariffs on buyers of Russian crude in a bid to curb Moscow’s war efforts in Ukraine. The threat has already disrupted trade routes, with at least two vessels carrying Russian oil to India diverting elsewhere, according to trade sources and LSEG shipping data.

Analysts at ING, led by Warren Patterson, warned that if Indian refiners pull back from Russian crude entirely, as much as 1.7 million bpd could be taken off the market—enough to wipe out expected surpluses through late 2026. This scenario could prompt OPEC+ to reconsider plans to ease the remaining 1.66 million bpd in output cuts.

However, Indian government sources told Reuters over the weekend that the country plans to continue purchasing Russian oil despite U.S. pressure.

Adding to uncertainty are broader concerns over global economic growth. Last week’s weaker-than-expected U.S. jobs data and comments from U.S. Trade Representative Jamieson Greer, suggesting recent tariffs are unlikely to be lifted anytime soon, have raised fresh fears about reduced fuel demand.

With supply and policy dynamics in flux, traders are bracing for continued volatility in the months ahead.