The July increase mirrors a June boost and is slightly smaller than the April and May hikes, following the UAE’s exit from the group on May 1.

Market outlook points to a structural shift: prices are expected to stay higher for longer due to persistent risk premiums and higher costs for insurance and alternative shipping, unless Hormuz reopens.

Prices are diverging from supply realities, with ongoing volatility tied to the unresolved Hormuz situation and uncertain, if any, reliable reopening.

Analysts estimate commercial inventories offer only about 2.3 days of excess consumption, making the market highly sensitive to any further disruptions or bottlenecks.

Consumers could cut back on spending if energy uncertainty persists, as volatile fuel costs weigh on confidence and household expenditures in developed economies.

A recent price drop accompanies ongoing negotiations to end the broader conflict, which could influence inflation and central bank policy, including potential ECB rate moves.

Seven core OPEC+ members, including Saudi Arabia and Russia, agreed to raise their July crude production target by 188,000 bpd, marking the fourth straight monthly increase amid Hormuz Strait disruptions and ongoing price volatility.

However, the gap between pledged production and actual output has widened, with total OPEC+ production slipping from about 42.77 million bpd in February to 33.19 million bpd in April, underscoring difficulty in replacing disrupted exports.

There is consideration of reversing November 2023 voluntary adjustments to reflect current market dynamics and Iran-related supply constraints.

Disclaimer notes the content is informational and not financial advice, acknowledging potential AI-generated inaccuracies.

Overall, the move is framed as a stabilization measure but many analysts see it as unlikely to meaningfully increase supply amid current constraints.

No final public decision had been announced at the time, with sources speaking on condition of anonymity.