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Malay Mail
06-07-2025
- Business
- Malay Mail
Opec+ surprises market with bigger-than-expected August output hike
LONDON, July 6 — Saudi Arabia, Russia and six other key members of the Opec+ alliance yesterday said they would further increase oil output in August to 548,000 barrels per day. Analysts had expected the alliance to decide on another output increase of 411,000 bpd — the same target approved for May, June and July. The group said in a statement that 'a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories' led to the decision to further hike output. Jorge Leon of Rystad Energy told AFP that 'Opec+ keeps surprising the market — this latest hike was even larger than expected and sends a clear message, for anyone still in doubt: the group is firmly shifting toward a market share strategy. 'Two big questions now hang over the market: First, once the full 2.2 million barrels per day of voluntary cuts are unwound, will Opec+ target the next tier of 1.66 million barrels? And second, is there enough demand to absorb it? 'With prices holding comfortably above US$60 (RM253) and a turbulent geopolitical backdrop — especially given the fragile ceasefire in the Middle East, and broader risks in Ukraine and Libya — the answer to both questions might well be 'yes'.' UBS analyst Giovanni Staunovo said that 'effectively Kazakhstan and Iraq still overproducing their higher quotas is a factor supporting the cut unwind decision' on Saturday. The meeting comes after a 12-day conflict between Iran and Israel, which briefly sent prices above US$80 a barrel amid concerns over a possible closing of the strategic Strait of Hormuz, a chokepoint for about one-fifth of the world's oil supply. The wider Opec+ group — comprising the 12-nation Organisation of the Petroleum Exporting Countries (Opec) and its allies — began output cuts in 2022 in a bid to prop up prices. But in a policy shift, eight alliance members spearheaded by Saudi Arabia surprised markets by announcing they would significantly raise production from May, sending oil prices plummeting. Oil prices have been hovering around a low US$65-US$70 per barrel. By approving another output hike, heavyweight Saudi Arabia might seek to up pressure on members for not keeping to agreed quotas via slashing expected oil profits due to lower prices. An estimate by Bloomberg showed that the alliance's production increased by only 200,000 bpd in May, despite doubling the quotas. — AFP
Time of India
05-07-2025
- Business
- Time of India
Oil market watch: Saudi, Russia-led OPEC+ eyes fresh hike for August; focus to likely shift from price stability to market share
Saudi Arabia, Russia and six other major oil producers from the OPEC+ alliance will meet on Saturday to decide their crude output strategy for August, with analysts expecting the bloc to approve another production hike of 411,000 barrels per day (bpd), mirroring decisions made for May, June and July. Tired of too many ads? go ad free now The meeting will be held virtually and will include representatives from Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman, according to news agency AFP. The so-called 'Voluntary Eight' (V8) group within OPEC+ had earlier stunned markets by reversing course from prolonged supply cuts and opting to raise production sharply from May onwards. This shift has pulled down oil prices to a narrow band of $65–$70 per barrel, far below the highs seen earlier during Middle East tensions. Analysts cited by AFP say that the alliance appears increasingly focused on reclaiming market share over price stability. 'The group has placed an increased focus on regaining market shares over price stability,' said Saxo Bank analyst Ole Hansen, highlighting the competitive pressure from rising supply elsewhere, including the United States. Despite the scheduled hike, actual supply additions could fall short. As per AFP, Rystad Energy's Jorge Leon said that the real increase might be only 250,000–300,000 bpd, much like May's 200,000 bpd gain, despite doubled quotas. This shortfall is partly due to non-compliance by countries like Kazakhstan and Iraq, whose production exceeded agreed limits. UBS analyst Giovanni Staunovo added that such inconsistencies may be pushing leading producers like Saudi Arabia to tighten enforcement via output-driven price pressure. Tired of too many ads? go ad free now While market watchers are bracing for the expected rise, there is little anticipation of price shocks, especially as geopolitical concerns have eased. A recent 12-day conflict between Iran and Israel, which had temporarily pushed prices over $80, didn't cause supply disruptions. 'Given there were no supply disruptions so far, the war is unlikely to impact the decision,' Staunovo said, as cited by AFP. Hansen echoed that the conflict could even justify faster production increases if Iran's exports face future hurdles. According to news agency Reuters, earlier, some OPEC+ insiders believed that the group could consider a hike larger than 411,000 bpd. But consensus still leans toward a continuation of the current pace, especially as Brent futures hovered around $68.30 per barrel and WTI near $66.50 in holiday-thinned trade ahead of the meeting. Analysts such as Tamas Varga of PVM warned that additional output, if sustained, may swell global oil inventories in the second half of the year. 'Oil balance estimates will be reassessed and will suggest accelerated swelling in global oil reserves,' Varga said, as quoted by Reuters. The eight OPEC+ countries have already committed to raising production by 1.37 million bpd over four months, roughly 62% of the 2.2 million bpd they initially pledged to cut. With US nuclear talks with Iran possibly resuming and global economic policies shifting, the alliance's strategy is under growing scrutiny. Still, Saturday's meeting is not expected to trigger any major market volatility, as traders are largely in a 'wait-and-see mode', said Price Futures Group's Phil Flynn, who cited upcoming US fiscal changes and lingering tariff uncertainty as additional variables, according to Reuters.
Daily Mirror
23-06-2025
- Business
- Daily Mirror
Petrol price fear for Brit motorists as fuel could spike at pump in coming days
Oil prices have soared due to the conflict in the Middle East and Brits are being warned that they could be hit at the pump as the cost of petrol could also spike Brits are being warned to top up your tanks now as petrol prices could soar in the coming days due to the conflict in the Middle East. Iran has launched a missile attack today on a US military base in Qatar, retaliating for the American bombing of its nuclear sites. And oil prices had already soared to their highest point since January following the US attack over the weekend. The threat of US involvement in the conflict between Israel and Iran led the latter to warn of severe consequences and after the missile strikes Iran's parliament voted on Sunday to close the Strait of Hormuz - a crucial maritime route as around a fifth of the world 's oil supply passes through it. For the go-ahead to be given, Iran's Supreme National Security Council would still need to approve the decision but even just the possibility of the closure led to oil prices to surge. And this has a knock on effect for Brits at the pump. Now a latest post by Trump on Truth Social is claiming a "ceasefire" in the war between Israel and Iran has been agreed, but it is unclear at this stage how that will pan out. Looking at the impact on oil of conflict in the Middle East, Jorge Leon, head of geopolitical analysis at energy intelligence firm Rystad and ex-Opec official, commented: "An oil price jump is expected. In an extreme scenario where Iran responds with direct strikes or targets regional oil infrastructure, oil prices will surge sharply." While Susannah Streeter, head of money and markets at Hargreaves Lansdown, agreed that a continued Middle East conflict is likely to lead to price hikes. 'Prices at the pumps are set to track higher in response,' she said. 'Although they don't mirror crude prices, due to other factors to consider, such as refining capacity and demand for other oil uses, petrol prices do tend to follow a similar curve upwards. 'Fresh financial pain in terms of rising prices at the pumps could still be to come, if Iran moves to limit the flow of tankers through the key Strait of Hormuz off Iran.' She added: "If the Strait is closed there are fears it will lead to an oil price shock, and another big inflation problem, given how fuel costs are included in the basket of goods which are tracked." Meanwhile, RAC head of policy Simon Williams has also said that the price of fuel could go up further. 'The average price of a litre of petrol has increased by 1.5p to 133.5p in the last week, while diesel has gone up by 2p to 140p," he said. 'Although the cost of a barrel of oil jumped by $5 to $74 straight after Israel's 13 June attack on Iran, so far it hasn't climbed much higher. It's now trading around $77 - $12 a barrel, more expensive than it has been for the last three months, which is not yet enough to cause a major hike at the pumps. 'As retailer margins have been high for some time, the oil price rise has squeezed these to fairer levels for drivers. If, however, retailers are set on maintaining margins of around 12p a litre, we may well see the average price of fuel go up further. 'It's also important to note that the oil price is a long way off the $137.72 seen in the early days of the Ukraine war in spring 2022 which led to average prices reaching record highs in the summer of 191.5p for petrol and 199p for diesel."
Business Upturn
23-06-2025
- Business
- Business Upturn
Oil plunges over 4% as market shrugs off Iran's missile strike on U.S. base in Qatar
By Aditya Bhagchandani Published on June 23, 2025, 23:03 IST Oil prices tumbled more than 4% on Monday despite Iran launching six missiles at the U.S.-operated Al-Udeid Air Base in Qatar, as investors bet against long-term supply disruptions in the region. U.S. crude fell $3.18, or 4.31%, to $70.66 per barrel, while global benchmark Brent dropped $3.35, or 4.35%, to $73.66. Both contracts had spiked overnight after the U.S. struck Iranian nuclear sites over the weekend, with Brent briefly rising above $81 per barrel. Iran's missile attack, reportedly in retaliation for the U.S. strikes, targeted Al-Udeid — the largest American military base in the Middle East. While Iran's parliament signaled support for closing the Strait of Hormuz — a vital oil transit route — analysts noted that the final decision rests with the country's national security council. 'The market is pricing in a scenario where things de-escalate gradually,' said Jorge Leon, geopolitical head at Rystad Energy. However, he warned that a sudden shift could still pose serious risks, especially if Iran attempts to shut the Strait, through which nearly 20% of global crude passes. Despite the heightened tension, markets remained focused on signals of supply stability and increased production, brushing off immediate fears of disruption. This is a developing situation. Ahmedabad Plane Crash Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
Business Recorder
22-06-2025
- Business
- Business Recorder
Oil to open higher as US strikes on Iran boost supply risk premium
LONDON: Oil is likely to rise by $3-5 per barrel when trading resumes on Sunday evening after the U.S. attacked Iran at the weekend, market analysts said, with gains expected to accelerate only if Iran retaliates hard and causes a major oil supply disruption. U.S. President Donald Trump said he had 'obliterated' Iran's main nuclear sites in strikes overnight, joining an Israeli assault in an escalation of conflict in the Middle East as Tehran vowed to defend itself. Iran is OPEC's third-largest crude producer. 'An oil price jump is expected,' said Jorge Leon, head of geopolitical analysis at Rystad and a former OPEC official. 'Even in the absence of immediate retaliation, markets are likely to price in a higher geopolitical risk premium.' Global oil benchmark Brent crude could gain $3 to $5 per barrel when markets open, SEB analyst Ole Hvalbye said in a note. Brent settled at $77.01 a barrel on Friday and U.S. West Texas Intermediate at $73.84. Oil prices settle lower Ole Hansen, analyst at Saxo Bank, said crude could open $4 to $5 dollars higher, with potential for some long positioning being unwound. Crude had settled down on Friday after the U.S. imposed fresh Iran-related sanctions, including on two entities based in Hong Kong, and counter-terrorism-related sanctions, according to a notice on the U.S. Treasury Department website. Brent has risen 11% while WTI has gained around 10% since the conflict began on June 13 with Israel targeting Iran's nuclear sites and Iranian missiles hitting buildings in Tel Aviv. Currently stable supply conditions and the availability of spare production capacity among other OPEC members have limited oil's gains. Risk premiums have typically faded when no supply disruptions occurred, said Giovanni Staunovo, analyst at UBS. 'The direction of oil prices from here will depend on whether there are supply disruptions - which would likely result in higher prices - or if there is a de-escalation in the conflict, resulting in a fading risk premium,' he said. A senior Iranian lawmaker said on June 19 that the country could shut the Strait of Hormuz as a way of hitting back against its enemies, though a second member of parliament said this would only happen if Tehran's vital interests were endangered. About a fifth of the world's total oil consumption passes through the strait. SEB said any closure of the strait or spillover into other regional producers would 'significantly lift' oil prices, but they saw this scenario as a tail risk rather than a base case given China's reliance on Gulf crude. Ajay Parmar, oil and energy transition analytics director at consultancy ICIS, said it was unlikely Iran would be able to enforce a blockage of the strait for too long. 'Most of Iran's oil exports to China pass through this strait and Trump is unlikely to tolerate the inevitable subsequent oil price spike for too long - the diplomatic pressure from the world's two largest economies would also be significant,' he said.
