Oil Prices Edge Higher on U.S.-Russia Tensions
Oil prices rose on Monday despite the Organization of Petroleum Exporting Countries (OPEC) and its allies members (OPEC+) decision to raise output in September amidst tight US crude inventories, as per the Energy Information Administration data release.
The commodity market reacted negatively to tensions between US President Donald Trump and former Russian President Dmitry Medvedev, alongside remarks about nuclear submarines, which have also heightened concerns over global energy security.
International benchmark Brent crude was trading at $69.48 per barrel, up 0.30% from the previous session’s close of $69.27. The US benchmark West Texas Intermediate (WTI) crude rose 1.86% to $66.77 per barrel, up from $65.55 in the prior session.
Prices edged higher after eight OPEC+ members—Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, AAlgeria,and Oman—agreed to raise oil production by 547,000 barrels per day (bpd) in September from August levels, OPEC said in a statement Sunday.
The increase is part of a phased and flexible rollback of 2.2 million bpd in voluntary cuts that began April 1. The September adjustment corresponds to four monthly increments outlined in the group’s plan.
Citing a steady global economic outlook and current healthy market fundamentals as reflected in the low oil inventories, the group said: “The phase-out of the additional voluntary production adjustments may be paused or reversed subject to evolving market conditions.”
Meanwhile, weak US employment data released on Aug. 1 bolstered expectations that the Federal Reserve (Fed) could lower interest rates in September. The US economy added 73,000 jobs in July, well below market expectations, according to data from the Labor Department released on Friday.
High interest rates tend to strengthen the dollar, making oil more expensive for holders of other currencies and dampening demand. Additionally, renewed calls by US President Donald Trump for interest rate cuts, directed at Federal Reserve Chair Jerome Powell, have raised concerns about the central bank’s independence.
Tensions between Trump and former Russian President Dmitry Medvedev, alongside remarks about nuclear submarines, have also heightened concerns over global energy security. On Sunday, Trump said that two US nuclear submarines had arrived “where they need to be,” after ordering their deployment in response to Medvedev’s comments.
“They are in the region, yeah, where they have to be,” Trump told reporters before departing his New Jersey golf resort. The remarks followed Medvedev’s warning last week that US pressure on the Kremlin over the Ukraine war risks escalating into a broader conflict, not only between Russia and Ukraine but also involving the United States.
Trump has threatened new sanctions and secondary tariffs on Russia unless it ends the war in Ukraine within “about 10 or 12 days,” shortening a previous 50-day deadline set in July. He gave Russian President Vladimir Putin a 50-day deadline, which he later revised to Aug. 8.
Trump hit back in a Truth Social post that said, “Tell Medvedev, the failed former president of Russia, who thinks he’s still president, to watch his words. He’s entering very dangerous territory!”
After Medvedev said Trump should remember “how dangerous the fabled ‘Dead Hand’ can be” in a post on the messaging app Telegram that referenced the Soviet Union’s doomsday nuclear system, the U.S. president said he would reposition the submarines.
Calling the comments “highly provocative,” Trump said on Truth Social that he was taking action “just in case these foolish and inflammatory statements are more than just that.”
“The combination of a weakening economic outlook and rising supply is likely to lead to further downward pressure on prices,” Daniel Hynes, a senior commodity strategist at the Australia and New Zealand Banking Group, said in a note. “For the moment, this is offsetting some bullish factors. Trump continues to put pressure on Russia to reach a truce deal with Ukraine.” NNPC Posts N905bn June Profit, Remits N6.96tn in 5 Months to FG
