Oil Prices Climb Amid Rising Geopolitical Tensions and Modest OPEC Output Hike

Highlights:

• Oil Rebounds: Brent crude rose 2.1% to $US64.09, while WTI hovered near $US62 at the time of writing.
• Geopolitical Pressure: Attacks in Russia, Iran’s nuclear dispute, and new U.S. tariffs fuel global uncertainty.
• OPEC+ Keeps Caution: The alliance opted for a modest July output increase, calming oversupply fears.

Crude rebounds as market eyes global unrest and trade developments

Global oil prices surged following a weekend of heightened geopolitical risks and a smaller-than-expected production increase by OPEC and its allies. Brent crude, the international benchmark, rose as much as 2.1% to reach $US64.09 per barrel, while West Texas Intermediate hovered around $US62 at the time of writing. This marks a rebound after Brent crude lost 2.2% the previous week.

Global tensions stoke market uncertainty

Washington-based geopolitical concerns took centre stage after Ukraine launched attacks on air bases deep within Russia. In the Middle East, Iran rejected findings from a report detailing the expansion of its enriched uranium reserves. Meanwhile, U.S. President Donald Trump announced plans to raise tariffs on steel and aluminium, escalating trade tensions. These developments come on top of broader market unease triggered by ongoing trade disputes and military uncertainty, both of which have put pressure on global demand forecasts in recent months.

OPEC+ sticks to cautious production strategy

Over the weekend, OPEC and its partners (OPEC+) decided to increase oil production by 411,000 barrels per day for the month of July. While the figure aligns with earlier increases in May and June, it was notably less than the more aggressive hikes some traders had anticipated. This decision helped calm market fears of oversupply. Oil prices have experienced a turbulent ride over the past two months, briefly plunging to four-year lows amid concerns about trade wars and shifting production strategies. Although prices have recovered somewhat, crude remains nearly 15% lower year-to-date at the time of writing. The latest rally highlights how sensitive the oil market remains to geopolitical developments and production policy signals.

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