Oil prices stay above $100 as US-Iran tensions offset OPEC+ output hike

Oil prices stayed above $100 per barrel as US-Iran tensions persisted and OPEC+ announced a new output increase. The lack of a peace deal between the United States and Iran kept markets cautious, despite efforts to ease shipping blockades in the Gulf region.

Key Highlights

• Oil prices stayed above $100 per barrel amid US-Iran tensions and Gulf shipping disruptions
• OPEC+ announced a 188000 barrel per day output increase for June for seven members
• US President Trump pledged to help free ships stranded in restricted Gulf waterways
• Negotiations between the US and Iran stalled, with both sides holding firm on key demands

US-Iran Negotiations and Shipping Blockades

US President Donald Trump stated that the United States would work to free ships stranded in restricted Gulf waterways. Trump posted on Truth Social that the US would guide ships safely out so they could resume business operations. Iran, meanwhile, proposed to set aside nuclear issues until after the ongoing war ends and both sides agree to lift blockades on Gulf shipping.

Negotiations between the US and Iran continued over the weekend, with both countries reviewing each other's responses. ANZ analysts noted that peace talks have stalled, as both sides refuse to compromise on their main demands. The ongoing conflict has kept oil traffic in the region limited, supporting high oil prices.

Oil Price Movements and OPEC+ Output Decision

On Monday, Brent crude fell 64 cents, or 0.59 percent, to $107.53 a barrel by 2308 GMT, after dropping $2.23 on Friday. US West Texas Intermediate crude declined 84 cents, or 0.82 percent, to $101.10 a barrel, following a $3.13 loss on Friday. Despite these declines, both benchmarks remained above $100 per barrel due to continued uncertainty in the region.

OPEC and its allies, known as OPEC+, announced on Sunday that they will raise oil output targets by 188,000 barrels per day in June for seven member countries. This marks the third consecutive monthly increase. The planned increase for June matches the May target, minus the share of the United Arab Emirates, which left OPEC on May 1.

However, analysts expect that the higher output will remain mostly on paper as long as the Iran war disrupts oil supplies through the Strait of Hormuz. The ongoing conflict continues to impact the movement of oil and keeps prices elevated.

Market Outlook

The oil market remains volatile as negotiations between the US and Iran show little progress. The situation in the Gulf, combined with OPEC+ output decisions, will likely continue to influence oil prices in the near term.

Also Read: Asia’s energy crisis deepens as clean energy rises amid soaring oil prices

CarBike 360 Says

Despite efforts by OPEC+ to stabilize supply, geopolitical tensions continue to dominate market sentiment. With uncertainty surrounding future supply disruptions and demand resilience, oil prices are likely to remain volatile. For consumers and policymakers alike, the coming weeks will be crucial in determining whether prices ease or push even higher.