Crude oil prices edged higher on Monday after U.S. President Donald Trump extended the tariff deadline for a trade deal with the European Union, offering temporary relief to global markets. However, investors say the rally remains fragile due to OPEC+ plans to increase production, which continues to pressure market sentiment.
Brent, WTI Post Modest Gains Despite Oversupply Concerns
At the time of writing, Brent crude traded at $64.96 per barrel, while West Texas Intermediate (WTI) rose to $61.68. Both benchmarks gained from Friday’s close, reversing last week’s losses driven by oversupply fears and slow progress in nuclear negotiations with Iran.
Crude Oil Prices as of May 26, 2025
- Brent Crude: $64.75 ▼ -0.05%
- WTI Crude: $61.49 ▼ -0.07%
- Murban Crude: $63.60 ▼ -0.55%
- Natural Gas: $3.280 ▼ -1.62%
Market analysts attributed the uptick to President Trump’s surprise extension of tariff talks with Brussels, which shifted investor focus back to trade optimism.
“Crude oil and U.S. equity futures opened stronger after President Trump delayed the EU tariff decision,” said Tony Sycamore, analyst at IG.
OPEC+ Output Plans Offset Bullish Momentum
Even as the tariff reprieve boosted sentiment, oil prices remained under pressure due to OPEC+ signals of further output increases. Sources report the group may raise production by an additional 411,000 barrels per day in July, following a similar boost in June.
This anticipated increase has added bearish weight to the market outlook, with traders citing growing concerns over a potential glut.
“The prospect of an oversupplied market continues to cap price gains,” Sycamore added.
U.S.–Iran Nuclear Talks Remain Unresolved
Meanwhile, fresh talks between the United States and Iran ended Friday in Rome with little progress. While both parties signalled continued engagement, no breakthrough was achieved.
Iran’s Foreign Minister Abbas Araqchi called the discussions “one of the most professional rounds,” while a U.S. official described the outcome as “constructive but incomplete.”
For now, Iranian crude remains largely restricted from global markets, easing immediate fears of a supply flood.
Shale Faces Structural and Regulatory Barriers
Back in the U.S., shale producers continue to face cost challenges. According to the Dallas Fed Energy Survey, new wells require oil prices between $61 and $70 per barrel for profitability. Further complicating matters, Bloomberg reports that Texas regulators have begun restricting drilling due to rising underground wastewater pressures.
These constraints suggest U.S. production is unlikely to fill any major supply gaps if prices remain below optimal thresholds.
Crude Oil Prices Rebound Faces Headwinds
Despite temporary support from tariff delays, oil prices remain vulnerable due to persistent oversupply risk and geopolitical uncertainty. With OPEC+ pressing forward on output hikes and Iran nuclear talks dragging on, the market may see limited upside in the short term.
While President Trump’s tariff extension provided a brief rally for oil markets, OPEC+ output plans and unresolved geopolitical tensions continue to cast a shadow. Analysts say unless production levels are curbed or global demand rises significantly, crude prices may struggle to maintain upward momentum.