Crude Oil Price Dives as OPEC+ Agrees to Another Supply Hike

Crude oil prices plunged in the perpetual futures market after President Donald Trump eased fears of an imminent escalation with Iran, while OPEC+ added further bearish pressure by agreeing to increase oil production once again.

Brent, the global benchmark, dropped from last week’s high of $91 to $84, while West Texas Intermediate (WTI) moved to $81. The two benchmarks have dropped by over 13% from their July highs.

Going into the weekend, most people were expecting the US to launch a major attack against Iranian infrastructure. Trump himself hinted at the attack during a Camp David event, saying that he would hit Iran hard. 

CBS and the Wall Street Journal added that Trump had authorized new attacks, hoping that they would bring the Iranians to the negotiating table. 

In a social media post, Trump said that he had been asked by Iran and other Middle Eastern countries to hold off any attack. He noted that the parameters of a deal to reopen the Strait of Hormuz had been agreed to.

The statement came after Trump talked with Saudi Arabia’s Mohammed bin Salman, who pressed him to give dialogue a chance. Countries in the region are concerned that Iran will respond to these attacks by hitting their critical infrastructure, including the vital desalination plants. 

The countries are also worried about their defense capabilities since most of them, including the United States, are running out of munitions.

Crude oil prices are falling because Trump’s decision means that critical oil infrastructure will not be hit for now. There is also intensified efforts to reach an agreement between the two sides.

The risk, however, is that the fighting has merely paused rather than ended. Since the two sides have yet to reach a formal ceasefire agreement, hostilities could resume at any time, as they did last week when Iran launched attacks on US bases in Jordan.

OPEC+ Boosts Production

Crude oil prices are also under pressure after the OPEC+ cartel agreed to raise its production quota for September, completing the unwinding of an additional layer of voluntary output cuts. The group will increase production by 188,000 barrels per day beginning in September. In a note, a Rystad analyst said:

“Having ​completed the restoration campaign, OPEC+ has little incentive to rush into further supply changes. Our base case is a fourth-quarter pause while the ‌group ⁠prepares for the 2027 quota negotiations.”

Crude oil markets are officially closed during the weekend. As such, traders are turning to perpetual futures on platforms like Hyperliquid and prediction markets like Kalshi. On Hyperliquid, WTI had open interest of $156 million and a 24-hour volume of $222 million. Brent had a 24-hour volume of $130 million.

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