International Oil Prices Decline Following OPEC+ Decision to Increase Output

YM Lee

Summary

OPEC+ decided to increase oil production, leading to a downward trend in international oil prices.
The possibility of U.S. government and President Trump's sanctions on Russian crude oil is adding uncertainty to the market.
With global crude oil supply increasing, commercial inventories are projected to expand until the end of the year, but uncertainty over the inflow of Russian crude oil continues in the short term.

The Scale of Decrease in Russian Crude Oil Supply is a Variable

As the Organization of the Petroleum Exporting Countries (OPEC+) considers a significant increase in oil production, international oil prices have declined again.

October Brent Crude futures traded at $68.96 per barrel, down 1% as of 10:22 a.m. London time. September West Texas Intermediate (WTI) futures recorded a 1.1% decrease at $66.62 per barrel.

At its weekend meeting, OPEC+ approved an additional daily production of 547,000 barrels starting in September. This figure aligns with expectations. Since 2023, as oil exports from non-member oil-producing countries increased due to previous OPEC+ supply cuts, OPEC+ members have begun to ramp up production this year to regain market share.

In the oil market, the U.S. government is considering measures against countries such as India that purchase Russian crude oil, possibly starting later this week. At the end of last month, President Donald Trump warned that if Russian President Vladimir Putin did not sign a peace agreement with Ukraine within 12 days, additional tariffs would be imposed on countries importing Russian oil. He also criticized India's purchase of Russian crude and announced a 25% tariff along with additional penalties.

The Trump administration's pressure on Russian oil trade has been seen as a factor that could reduce the supply of Russian crude oil and thus drive up international oil prices.

Bjarne Schieldrop, chief commodity analyst at SEB AB, said, "With rising inventories in the second half of 2025, there is a strong possibility that international oil prices will fall." However, he also noted, "Inventory accumulation levels are uneven by region, making the situation uncertain."

Due to the recent supply increase, global oil supply is expected to outpace demand until the end of this year, leading to larger commercial inventories. However, in the short term, uncertainty remains about the inflow of Russian crude oil.

Guest reporter Kim Jeong-ah kja@hankyung.com