Oil prices slipped slightly on Tuesday as markets weighed expectations of an OPEC+ production increase and mounting concerns over a global economic slowdown driven by potential U.S. tariff hikes.
Brent crude futures for September delivery dropped 16 cents, or 0.24%, to $66.58 a barrel, while U.S. West Texas Intermediate (WTI) fell 20 cents, or 0.31%, to $64.91.
Analysts point to a likely continuation of accelerated output hikes by OPEC+, the alliance of the Organization of the Petroleum Exporting Countries and allies including Russia. According to four OPEC+ sources, the group is set to boost output by 411,000 barrels per day (bpd) in August, following increases in May, June, and July. If confirmed, this will bring the total 2025 increase to 1.78 million bpd—roughly 1.5% of global demand. The final decision will be made during the OPEC+ meeting on July 6.
At the same time, market sentiment remains cautious due to looming U.S. tariff risks. Treasury Secretary Scott Bessent warned that countries could face steep tariff hikes—ranging from 11% to 50%—as a July 9 deadline nears, potentially reversing the temporary 10% rate. Investors fear that rising tariffs could dent global trade and energy demand.
Morgan Stanley projects Brent crude will drop to around $60 per barrel by early 2026 due to expected oversupply and easing geopolitical tensions. The bank forecasts a surplus of 1.3 million bpd in 2026. Brent prices had spiked above $80 after U.S. strikes on Iran’s nuclear sites in mid-June but later plunged to $67 following a ceasefire announcement between Israel and Iran.
Overall, oil markets remain volatile, shaped by production policy shifts and geopolitical uncertainty.
