OPEC+ Output Boost Faces Hurdles Amid Tensions and Shipping Constraints

OPEC+, a group of oil-producing countries, has agreed to increase crude output for a fifth consecutive month, but there are concerns about whether they can actually deliver on this promise.

The decision was made at a meeting over the weekend, where the seven core members of OPEC+ decided to lift production quotas by 188,000 barrels per day from August. This brings the total increase since April to almost 800,000 bpd.

However, there are several factors that could impact their ability to ship this increased output, including the continued use of ports outside the Strait of Hormuz and the ongoing tensions between the US and Iran. As a result, it's unclear whether OPEC+ will be able to meet demand or if prices will remain low.

The crude oil futures market appears to be pricing in a return to oversupply, with Brent contracts trading around $71.72 per barrel on Monday. This is down from the close of $72.12 on July 3 and below the $72.48 finish on February 27, just before the US-Israeli attack on Iran.