Oil prices climbed nearly 2% on Monday as signs of robust demand helped markets look past a larger-than-expected OPEC+ production increase for August and persistent concerns over U.S. tariff policy. Brent crude settled $1.28 higher at $69.58 a barrel, up 1.9%, while U.S. West Texas Intermediate (WTI) crude rose 93 cents, or 1.4%, to $67.93. Earlier in the day, both benchmarks had dipped on initial concerns, with Brent falling to $67.22 and WTI to $65.40.
Despite OPEC+ agreeing over the weekend to raise production by 548,000 barrels per day in August—above the 411,000-bpd hikes implemented in the prior three months—traders focused on strong demand signals. Travel data showed record numbers of Americans hit the roads and skies for the July Fourth holiday, lending support to demand forecasts. Saudi Arabia also raised the price of its Arab Light crude for Asian buyers to the highest in four months, signaling confidence in market strength.
While the OPEC+ agreement brings back nearly 80% of the 2.2 million bpd in voluntary cuts from eight key producers, analysts noted that actual output increases have lagged behind targets, with Saudi Arabia accounting for most of the returning supply. Goldman Sachs expects another 550,000-bpd increase to be announced at the group’s next meeting in early August.
Meanwhile, trade concerns lingered as U.S. officials signaled delays in implementing tariffs without offering clarity on rate changes. Treasury Secretary Scott Bessent said a flurry of last-minute offers from global partners was still under review ahead of the July 9 deadline. This introduced further uncertainty around potential economic fallout and future oil demand.
Geopolitical developments also drew attention. Yemen’s Houthis claimed responsibility for sinking a cargo ship in the Red Sea in their first known high-seas attack of the year. At the same time, diplomatic efforts were underway in Washington and the Middle East, including a potential U.S.-brokered Gaza ceasefire and ongoing dialogue between Iran and the U.S., which some see as a possible path to easing regional tensions.