02.07.2025 19:11
Iran's abrupt termination of cooperation with UN nuclear inspectors sent ripples through global energy markets on Tuesday, resulting in a two percent surge in oil prices. This decisive action, implemented just days before a crucial OPEC+ meeting, immediately impacted trading activity.
Brent crude oil surpassed $67 per barrel, while West Texas Intermediate (WTI) climbed towards $66, a sharp reversal following a recent price drop triggered by a temporary ceasefire between Israel and Iran. The brief period of calm proved short-lived, as geopolitical instability now fuels the price increase alongside dwindling US oil reserves, upcoming economic indicators, and anticipated production decisions from OPEC+.
Contributing to the upward pressure, the American Petroleum Institute reported a significant 1.4 million-barrel decline in oil stockpiles at the Cushing storage hub last week. Verification by official US government data would confirm the steepest weekly decrease since January, leaving inventories at their lowest seasonal level since 2005. This substantial reduction at Cushing, the key pricing hub for WTI, underscores a tighter-than-anticipated oil supply situation.
The heightened market tension builds towards the weekend's OPEC+ meeting, where a decision on further production increases will be made. This meeting, involving Russia and other key players, is set to occur against a backdrop of renewed volatility following the recent conflict's temporary impact on oil prices. Sunday's virtual OPEC+ meeting is widely anticipated to result in another output hike.
Analysts at Goldman Sachs, including Yulia Zhestkova Grigsby, suggest the market has already absorbed this expected production increase. Grigsby noted in a recent report that a significant market response is unlikely should OPEC+ proceed with the widely anticipated production hike, reflecting a market consensus already anticipating this outcome. The overall market sentiment remains complex, shaped by a confluence of factors beyond the immediate OPEC+ decision. The information for this report was gathered from internet sources.
