Oil prices drop after Trump cancels attack on Iran to seek deal
XLE•OPEC+ output hike
On Sunday, the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, approved an oil production quota increase of around 188,000 barrels per day from September.
Export disruptions from the Gulf, Russia and Kazakhstan, caused by the Iran and Ukraine wars, have meant successive monthly OPEC+ hikes over most of this year have not translated into extra oil on the market.
Analyst view and tanker traffic
"Given the persistent depletion of global oil inventories, we would expect firmer prices during August — unless, of course, oil flows in the region recover meaningfully and sustainably, while also keeping a watchful eye on signs of weakening demand. Under the current VVV trading conditions (volatile, vicious, and violent), the odds of getting it embarrassingly wrong are reasonably high," said PVM analyst Tamas Varga.
Two tankers laden with Saudi oil crossed the Bab el-Mandeb Strait out of the Red Sea over the weekend but traffic slowed in the Strait of Hormuz and Bab el-Mandeb, shipping data showed.
The United Kingdom Maritime Trade Operations has reported three tanker attacks since Saturday.
Recent gains and shipping risks
The two contracts jumped more than 20% last month after fighting between the U.S. and Iran resumed and attacks on several tankers around Oman heightened security concerns, deterring shippers from entering the Gulf to load oil.
Iran said on Monday there were no talks under way with the United States and no plans for any meetings, contradicting U.S. President Donald Trump who had cited talks he said would take place as justification for calling off attacks, repeating previous patterns.
