Oil prices declined during Asian trading on Monday as easing geopolitical tensions between Israel and Iran prompted traders to reduce the risk premium. Additionally, expectations of further output increases by OPEC+ put downward pressure on crude.
Brent crude for August delivery fell 0.8% to $67.20 per barrel, while West Texas Intermediate (WTI) crude dropped 1.1% to $64.77 per barrel by 21:44 ET (01:44 GMT). Despite the recent dip, oil prices are still set to rise over 5% this month, driven initially by the conflict between Israel and Iran.
Mixed signals came from China’s latest manufacturing data, with the Purchasing Managers’ Index showing contraction in June, providing only moderate support for oil demand.
Ceasefire Holds, Middle East Supply Risks Ease
Crude prices retreated after sharp gains last week, as the ceasefire between Israel and Iran appeared stable, reducing fears of prolonged supply disruptions in the Middle East. The 12-day conflict had pushed oil close to annual highs, especially following Israeli and U.S. strikes on Iranian nuclear facilities.
The U.S. brokered the ceasefire, and President Donald Trump indicated upcoming nuclear negotiations with Iran, further easing tensions. The ceasefire also quelled concerns over potential Iranian blockades of the Strait of Hormuz, a critical oil shipping route.
OPEC+ Output Increase Expected Ahead of July Meeting
Market attention now turns to OPEC+’s scheduled meeting on July 6, where the group is widely expected to approve a production increase of approximately 411,000 barrels per day for August—consistent with recent monthly hikes.
Earlier this year, OPEC+ began reversing two years of production cuts to counter persistently low prices and discipline members exceeding quotas.
Outside OPEC+, traders are also watching U.S. fuel demand as summer travel season ramps up.
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