Overview
- OPEC+ agreed on Sunday to raise collective production quotas by 188,000 barrels per day from August, the fourth consecutive monthly increase in its phased unwind of 2023 cuts.
- Physical exports through the Strait of Hormuz have started to recover but remain well below pre‑war throughput, so much of the quota rise is currently constrained by logistics and will take months to reach markets.
- Brent and WTI have retraced to roughly pre‑war levels near $72 a barrel as a record IEA‑coordinated strategic stock release, weaker Chinese imports, and higher non‑Middle‑East flows have eased near‑term tightness.
- Major forecasters have cut medium‑term price outlooks with Citi projecting about $60 per barrel by year‑end and the IEA warning of a potential roughly 5.05 million bpd surplus by 2027 if supply rebounds as expected.
- The market now faces two‑sided risk: renewed Gulf conflict or fresh shipping disruptions could re‑tighten markets quickly, while continued demand weakness and rising exports outside the Gulf could deepen an oversupply that pressures prices and Gulf export revenues.