Global oil prices held relatively firm on Friday despite a sharp rebound in OPEC crude production, as investors balanced increased supply against lingering geopolitical risks in the Middle East and continued uncertainty surrounding exports through the Strait of Hormuz.
As at the time of writing of 07:20 a.m. (WAT), Brent crude traded at $72.36 per barrel, while West Texas Intermediate (WTI) stood at $69.15 per barrel, indicating a resilient market even after OPEC recorded its largest monthly production increase in years.
According to a Reuters monthly survey cited by Oilprice.com, the 11 OPEC member countries pumped 19.43 million barrels per day (bpd) in June, up from 16.13 million bpd in May an increase of about 20.5%, equivalent to an additional 3.3 million bpd. The rebound followed the gradual restoration of Gulf oil production after months of war-related disruptions and restricted tanker movements through the Strait of Hormuz.
The recovery was led by Iran and Kuwait, which restored significant volumes after the easing of export restrictions under the recent U.S.-Iran agreement. Saudi Arabia and Iraq also increased output, while Nigeria and Libya posted more modest gains despite being less affected by the Gulf crisis.
However, analysts caution that the production rebound does not signal a full return to normal market conditions. OPEC output remains below the group's official quotas, while tanker traffic through the Strait of Hormuz is still significantly lower than pre-conflict levels as insurers and shipping companies continue to exercise caution over security risks.
The increase in OPEC production has also coincided with record U.S. crude output of nearly 14 million bpd and stronger exports from the United Arab Emirates, adding to expectations of a better-supplied global market. These developments have kept upward pressure on supply and limited gains in international crude prices.
Even so, geopolitical uncertainty continues to provide support for the market. Any setback in negotiations between Washington and Tehran or renewed disruption to shipping through the Strait of Hormuz could quickly tighten supply expectations and reverse the recent price trend.
For Nigeria, crude prices remaining around the $70 per barrel mark could further ease pressure on domestic fuel costs. Recent reductions in petrol prices by Dangote Refinery, alongside improved product availability and increased competition among marketers, suggest that the downstream market may continue to witness softer prices if international oil fundamentals remain favourable.