Oil prices jumped above $67 per barrel again after Saudi Arabia raised the official selling price for its flagship Arab Light for Asian buyers. Saudi Aramco seriously added +$1 to the price, raising the premium to $2.20 above the benchmark—changes take effect in August.
This move hit the market almost simultaneously as eight OPEC+ participants agreed on a much tougher production upgrade than analysts had anticipated. Instead of the expected light increase, the cartel rolled out 548K barrels per day starting in August. Meanwhile, discussions are already in the air about a possible continuation of the expansion in September—the final decision will be made at the OPEC+ meetup on August 3.
The decision hit right at the peak of the summer demand hype, and it is clearly not a coincidence. This time, Aramco's pricing looks like a signal to the market: there is not enough oil in circulation, and this move has only strengthened those feelings.
This point of view was confirmed by Ole Hansen, head of commodity strategy at Saxo Bank. He stated:
"The decision to raise prices during the peak consumption season is a clear signal that physical markets remain tight. This indicates that additional volumes can still be absorbed for now."
Traders initially expected August production volumes to remain at the levels of previous months—411,000 barrels per day, similar to the data for May, June, and July. However, OPEC+ made a different decision.
OPEC increases supplies against the backdrop of a trade delay from Trump.
Instead of a standard increase, the alliance went far beyond expectations, and sources within OPEC+ confirm: the possibility of an additional increase in production by another 548,000 barrels per day in September is being discussed.
The official statement from the cartel made on Saturday justified the decision with a stable global economic outlook and healthy fundamental market indicators. There are currently no signs of a slowdown in production growth. Meanwhile, demand in China and the US remains high, which the market sees as a factor encouraging more aggressive actions from producers.
Essentially, the cartel is responding to signals from the physical market: demand is stable, prices are rising, and Saudi Arabia seems to be testing how much the market can absorb the new volume.
Notably, the news of rising production and prices coincided with another significant event: US President Donald Trump postponed the deadline for new tariffs. The original deadline of July 9 was pushed to August 1, providing additional time for negotiations. This gave short-term relief to Europe, which was expecting a severe blow to exports to the US. However, the final outcome remains uncertain, and geopolitical uncertainty continues to exert pressure on raw material markets.
New OPEC strategy and traders' reaction.
Against this backdrop, a broader picture emerges: for several years, #ОПЕК has deliberately kept taps limited, restricting production for stable quotes. But it seems the game is changing. According to analysts, including Ole Hansen from Saxo Bank, the current dynamics indicate a paradigm shift.
In a tight market, especially at the peak of the driving season, spot lots are flying off the shelves instantly—the market is literally sucking up any offers. This only confirms that the imbalance remains: demand for real oil is still outpacing supply, despite the pumping from OPEC+.
But not everyone is on board with this narrative. Robert Rennie, head of commodity and carbon research at Westpac, takes a more cautious view.
"OPEC+ is clearly benefiting from the current supply shortage, but this advantage may prove to be short-lived. Seasonal demand is likely to fade soon."
This is where the fluctuations can begin. Oil is currently trading in a narrow channel, despite the fact that geopolitics has eased a bit—for example, the escalation between Israel and Iran has noticeably decreased. Brent recently broke through $80, but fundamental price stability is still not visible: traders are testing the limits but are not rushing to enter long-term positions.
Additional risks: attack in the Red Sea.
Meanwhile, geopolitical risks are once again coming to the forefront, adding additional volatility to an already overheated market. This time the hotspot is the Middle East, where the situation on a key maritime route has sharply escalated. Yemeni Houthi rebels, supported by Iran, officially announced an attack on a commercial vessel in the Red Sea—this is the first attack on commercial shipping since December last year, which instantly fueled sentiment in the markets.
