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OPEC boosts oil supply; Trump delays tariffs

07.07.2025 18:22

Oil prices surged past $67 a barrel following a surprise price increase by Saudi Arabia for its Arab Light crude in the Asian market, as reported by various internet sources. This unexpected hike, a dollar per barrel increase, boosted the premium to $2.20 above the benchmark, effective August. The announcement, originating directly from Saudi Aramco, the state-owned oil company, coincided with a significant decision by eight OPEC+ members.

Simultaneously, the OPEC+ alliance announced an unprecedented increase in oil supply, exceeding all expectations. Instead of the anticipated modest rise, the group will inject an additional 548,000 barrels per day into the global market this August. Further expansion in September is already under consideration, contingent upon the outcome of their August 3rd meeting. This strategic move, implemented during the peak summer demand period, suggests a deliberate action rather than a reactive measure to curb prices.

Aramco's price adjustment, far from signaling a cooling-off period, actually reinforced the perception of a tight physical oil market among traders. This interpretation was corroborated by Ole Hansen, Saxo Bank's head of commodity strategy, who stated that the price hike during peak demand clearly indicated persistent tightness in the physical market, implying the additional barrels are currently absorbable. Market analysts had anticipated August production to mirror the previous three months (May, June, and July) at 411,000 barrels per day, a prediction decisively refuted by the OPEC+ announcement.

In a significant departure from expectations, OPEC+ unveiled a considerably larger production increase and hinted at further expansion. Delegates confirmed that a potential additional 548,000 barrel per day increase in September is currently being evaluated. A Saturday statement from the cartel attributed the decision to a positive global economic outlook and robust market fundamentals, signaling a sustained commitment to increased production. With robust demand persisting in both the United States and China, the market reacted positively to this demonstration of confidence in ongoing strong demand.