Brent crude for October fell by 5.16 percent to settle at 83.39 dollars per barrel, and WTI for September dropped almost 6 percent to 79.66 dollars a barrel.

Prices eased after President Trump indicated that new discussions with Iran would commence later that day, reducing worries about supply interruptions from the region. Further pressure resulted from an agreement by Saudi Arabia, Russia, and five other OPEC+ nations during a virtual meeting on Sunday to increase daily production by 188,000 barrels beginning in September, even as the Middle East conflict continues to affect supplies.

The participating nations stated in a joint release that they would carry out a production adjustment of 188 thousand barrels daily.

Analysts had largely anticipated this move by the leading members of the expanded OPEC+ group.

Jorge Leon from Rystad Energy noted that OPEC+ has now completed the reversal of its voluntary reductions, with the upcoming task being to handle any potential oversupply once export routes stabilize.

He cautioned that this step has minimal immediate effect since the Strait of Hormuz continues to face limitations, and the true influence on markets will occur when regular export activities return.

Gulf nations have faced challenges in expanding shipments because of restrictions in the Strait of Hormuz due to Iranian actions amid the Middle East conflict, although there was a short increase in traffic following a June agreement between the US and Iran.

UBS analyst Giovanni Staunovo pointed out that several OPEC+ countries are unable to meet their production targets owing to reduced capacity, making target increases less significant.

Anticipated Halt in Adjustments

The September production rise, approved by Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman, marks the end of unwinding the second of three cut packages implemented by the organization.

According to Rystad Energy's Leon, with the restoration phase complete, OPEC+ has little reason to pursue rapid further changes, expecting a pause in the fourth quarter ahead of 2027 quota discussions.

He added that geopolitics currently obscures the extent of the supply growth, which will become evident once exports normalize.

It is still uncertain when the group can effectively raise volumes, as some members like Iraq aim for substantial increases.

Russia, however, deals with ongoing Ukrainian drone strikes on its oil facilities, limiting output to around nine million barrels daily against a 9.8 million target.

Analysts from DNB Carnegie suggest that OPEC+ may encounter challenging negotiations on fresh quotas starting next year after this increase.

From late 2022 through 2023, OPEC+ responded to falling prices by implementing three rounds of cuts totaling nearly six million barrels per day.

Subsequently, key members including Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, Oman, and the UAE (prior to its May 1 departure) shifted to gradually increasing output from 2025 onward.

Leon expressed that group unity does not appear threatened currently, though the UAE's exit in May signals potential vulnerabilities.