Oil Prices Drop 3%... July Brent Falls Below $60

Follow-up – Al-Sabah Al-Jadeed:Oil prices dropped by more than 3% on Monday, amid signs of increased supply and weakening global demand.This came after Saudi Arabia and seven other OPEC+ countries announced another acceleration in their plan to phase out oil production cuts for the second consecutive month, during a virtual meeting to assess global market conditions and forecasts.The eight countries participating in the additional voluntary production cuts decided to add 411,000 barrels per day in June 2025 (as a ceiling, not necessarily an actual increase in production), three times what was originally planned.Oil prices had already ended trading on Friday, May 2, with a loss of around 1.5%, recording weekly declines ahead of the upcoming OPEC+ meeting.Oil Prices:Futures prices for Brent crude, July 2025 delivery, fell by 2.79% to $59.58 per barrel.West Texas Intermediate (WTI) futures for June 2025 delivery dropped by 3.04%, reaching $56.52 per barrel, according to real-time data from the specialized energy platform based in Washington.Both Brent and WTI benchmarks hit their lowest levels since April 9, following OPEC+’s agreement to accelerate production increases for the second straight month, raising output in June by 411,000 barrels per day.The original plan called for a gradual and steady unwinding of 2.2 million barrels per day in cuts over 18 months, from April 2025 to September 2026, with monthly increases of about 137,000 barrels.Accelerated Phase-Out:The latest decision means the eight countries have managed to restore 959,000 barrels per day out of the 2.2 million cuts in just three months.Saudi Arabia and its OPEC+ partners stated during the meeting that the phased increases could be paused or reversed based on market conditions, and they pledged to fully compensate for any excess production since January 2024.Market Analysis:Tim Evans, founder of Evans on Energy, commented: “The OPEC+ decision to raise production quotas by another 411,000 barrels per day for June reinforces market expectations of a shift toward a global supply surplus.”Reuters reported that the eight countries might fully phase out their voluntary cuts by the end of October if member compliance with quotas does not improve.Price Forecasts:Barclays and ING have both lowered their Brent price forecasts following the OPEC+ decision—cutting the 2025 estimate by $4 to $66 per barrel and the 2026 estimate by $2 to $60.ING now expects Brent to average $65 in 2025, down from a previous forecast of $70.Geopolitical Tensions:Meanwhile, tensions in the Middle East escalated after Israeli Prime Minister Benjamin Netanyahu vowed to retaliate against Iran, following a missile launched by the Iran-backed Houthi group that landed near Israel’s main airport.Iranian Defense Minister Aziz Nasirzadeh stated on Sunday that Tehran would respond if attacked by the U.S. or Israel.