Oil markets showed a downward trend at the start of the week. The barrel price of Brent crude fell to $71.09 during the day, testing its lowest level since February, before trading at $71.87, down 0.15 percent.
The decline was driven by the decision of OPEC+ countries to increase production and the renewed movement of maritime traffic in the Strait of Hormuz. Tanker activity in the strait increased following the ceasefire agreement reached between the US and Iran.
OPEC+ decides to increase production
OPEC+ countries decided at a virtual meeting on Sunday to increase daily oil production by 188,000 barrels starting in August. Saudi Arabia, Iraq, Kuwait, Oman, Algeria, Russia and Kazakhstan will be responsible for this increase. The decision marks the fifth consecutive monthly increase in the group's gradual unwinding of production cuts that began in 2023.
Strait of Hormuz traffic returns to normal
In the Strait of Hormuz, the transit point for about one-fifth of global oil and LNG shipments, traffic began returning to normal after the US-Iran memorandum of understanding signed on June 17. Previously, Tehran's disruption of navigation in the waterway and its targeting of the US, Israel and Gulf countries had caused oil prices to surge to $115 per barrel in early May.
Although occasional violations and ship attacks have occurred since the ceasefire, the number of tankers transiting the strait is steadily increasing. According to LSEG data, 10 Japan-linked vessels exited the strait on Monday, while a supertanker carrying Saudi oil set sail for South Korea over the weekend.
Meanwhile, crude oil production by the United Arab Emirates, which left OPEC on May 1, exceeded 3.8 million barrels per day in June, approaching a record level.
