Traders Weigh OPEC+, Tariffs, and Resilient Demand

Jul 11, 2025

The crude oil market traded with sharp volatility this week as traders balanced OPEC+ production increases, renewed geopolitical risks, and the threat of U.S. tariffs against evidence of strong underlying demand. This interplay shaped price action, with the market testing downside levels but finding bids on signs that supply additions may be absorbed more easily than feared.

OPEC+ Supply Increases Pressure Oil Prices Forecast

OPEC+ made headlines by announcing a 548,000 bpd production increase for August, a sharp acceleration from the previous pace of 411,000 bpd. This move unwound nearly 80% of the 2.2 million bpd voluntary cuts from members including Saudi Arabia, Russia, and the UAE, sparking a quick bearish reaction as prices slipped on concerns over additional barrels hitting the market.

However, the market quickly recognized that real additions often fall short of announced targets. Saudi Arabia has carried most of the load, limiting the effective supply shock. Sources suggested OPEC+ may add another 550,000 bpd in September, completing the unwinding cycle, but hinted at a possible October pause if seasonal demand slows.

Adding complexity, Houthi attacks in the Red Sea, including a deadly ship sinking, injected fresh geopolitical risk, tightening risk premiums on shipping lanes that carry critical crude flows.

Oilprice.com