Oil Prices Decline as "OPEC+" Increases Production.. Concerns Over Russian Supply Disruptions

Oil prices continued to decline today, Tuesday, August 5, affected by rising concerns of oversupply after the "OPEC+" group agreed to a new production increase, while threats of disruptions in Russian supplies partially supported prices.

Brent crude futures fell by 0.19%, recording $68.63 per barrel, while U.S. West Texas Intermediate crude dropped by 0.2% to $66.14 per barrel. This decline followed a drop in both crude types of more than 1% on Monday, marking the lowest closing levels in a week.

"OPEC+" _which includes the Organization of the Petroleum Exporting Countries (OPEC) and its allies_ approved an increase of 547,000 barrels per day in September, a move that represents a complete cancellation of the largest portion of previous production cuts of 2.5 million barrels per day (equivalent to 2.4% of global demand). However, analysts indicate that the actual amount added to the market may be less than announced.

In a related context, U.S. calls for India to stop its purchases of Russian oil have raised concerns about supply disruptions, amid U.S. pressures on Moscow to achieve peace with Ukraine. U.S. President Donald Trump threatened to impose a 100% tariff on Russian oil imports after announcing a 25% tariff on Indian imports last July.

India is the largest buyer of seaborne Russian oil, having imported 1.75 million barrels per day from January to June 2023, an increase of 1% compared to the same period in 2022, according to data obtained by "Reuters".

Daniel Hynes, senior commodity analyst at "ANZ Bank", stated: "Since the invasion of Ukraine in 2022, India has become a major buyer of Kremlin oil. Any disruption in these purchases will force Russia to seek alternative buyers from a shrinking group of allies."

The market is monitoring the implications of U.S. tariffs, which experts warn could slow economic growth and weaken global fuel demand.