Oil Price Today (July 6): Crude oil extends fall, hovers below $72. Here are 2 major reasons for the decline

Oil prices edged lower on Monday after OPEC+ agreed to raise its production targets again from August, while crude exports through the Strait of Hormuz continued to recover, signalling an increase in global supplies.

Crude oil price on July 6

Brent crude futures slipped 24 cents, or 0.33%, to $71.88 a barrel. U.S. West Texas Intermediate crude fell 11 cents, or 0.16%, to $68.58 a barrel. WTI did not settle on Friday as U.S. markets remained closed ahead of the Independence Day holiday on Saturday.

Oil prices were largely steady last week after witnessing declines over the previous few weeks. Investors closely tracked developments in talks between the United States and Iran over the future of shipping through the Strait of Hormuz, while also monitoring the gradual recovery in Gulf oil exports.


On Sunday, the Organization of the Petroleum Exporting Countries and its allies, including Russia, agreed to increase production targets by another 188,000 barrels per day from August. The move follows similar output hikes announced for June and July.

Also read: Global oil cartel OPEC+ to boost crude output. But can it deliver and who will buy?

The increase in production, however, has so far remained largely on paper. The U.S.-Israeli war with Iran had shut the Strait of Hormuz to tanker traffic used by major OPEC producers such as Saudi Arabia, Kuwait and Iraq, limiting their ability to raise output.

With the situation improving, Gulf producers have started restoring supplies that were disrupted during the conflict and are gradually increasing exports.

A Reuters survey showed OPEC's oil production rose by 3.3 million barrels per day in June from the previous month to 19.43 million barrels per day, rebounding from its lowest level in more than two decades.

Data also showed Gulf oil exports climbed by more than 3 million barrels per day in June compared with May, crossing 10 million barrels per day. Even so, export volumes remained about 40% below pre-war levels.

Where are prices headed?

Macquarie Group has significantly lowered its oil price forecasts for 2026 and 2027, citing expectations that crude flows from the Middle East will normalise faster than previously anticipated. Following the interim peace agreement between the United States and Iran, which has enabled oil shipments from the Persian Gulf to resume, the bank now expects Brent crude to average $77 a barrel in 2026, compared with its earlier estimate of $89. Its 2027 Brent forecast has also been cut to $64 a barrel from $74.

Despite several factors that could slow the recovery in regional oil production, Middle Eastern producers are likely to restore output more quickly than markets currently expect, strategists Peter Taylor, Vikas Dwivedi and others said in a research note.

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Tanker traffic through the Strait of Hormuz has also started improving. U.S. Vice President JD Vance said oil flows had returned to pre-war levels, although he did not provide supporting figures.

Some experts, however, believe a full reopening of the Strait of Hormuz will take longer. They said restoring normal operations will require coordinated vessel movements, restarting oil wells, repairing damaged infrastructure and reaching agreements on de-mining operations. In addition, some shipowners remain cautious about operating in the strait and the wider Persian Gulf.

Analysts said global oil inventories were drawn down during the prolonged disruption to shipping through the Strait of Hormuz and will take time to recover. They expect stockpiles to remain under pressure until additional crude supplies from the Gulf begin reaching global markets.

Last month, Saudi Aramco Chief Executive Officer Amin Nasser cautioned that disruptions in the Strait of Hormuz could delay the return of stability in global oil markets until 2027. According to him, prolonged disruptions could affect nearly 100 million barrels of oil supply every week. Saudi Aramco is the world's largest oil producer.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)