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Global crude oil prices edged lower on Monday after OPEC+ agreed to raise production targets for August, while improving crude exports through the Strait of Hormuz added to expectations of stronger global supplies.

International benchmark Brent crude fell 0.76 per cent, or 55 cents, to trade at $71.55 per barrel. US West Texas Intermediate (WTI) crude also declined by nearly 1 per cent, slipping 68 cents to trade below the $69-per-barrel mark.

OPEC+ Moves Ahead With Production Increase

The latest decline followed OPEC+'s decision to increase production targets from August as the alliance continues to reverse the voluntary output cuts introduced in 2023 to support oil prices, reported IANS.

Under the proposed plan, the combined production target of seven major producers, led by Saudi Arabia and Russia, will be raised by 188,000 barrels per day.

If implemented, the increase will lift cumulative production quota additions since OPEC+ began rolling back its supply curbs to around 940,000 barrels per day, equivalent to nearly 1 per cent of global oil demand, the report said.

Hormuz Export Recovery Improves Supply Outlook

Oil prices also came under pressure as crude exports through the Strait of Hormuz continued to recover, signalling that supplies from major Gulf producers are gradually returning to normal.

According to the report, exports have picked up following the easing of geopolitical tensions after the interim peace agreement between the United States and Iran.

Saudi Arabia and the United Arab Emirates have already restored oil exports to levels close to those seen before the conflict, increasing the volume of crude available in the global market.

Asian Markets See Higher Availability of Crude

The return of additional supplies has created a surplus in several Asian markets, reversing the sharp price rally witnessed during the recent conflict in West Asia.

The increase in supply has also raised the prospect of stronger competition among OPEC producers as they seek to protect or expand their market share, the report noted.

One More Phase of Output Rollback Expected

The August production increase is expected to be the second-last stage of unwinding the production cuts announced by OPEC+ in 2023. The alliance is likely to implement one final production increase in September, which would complete the rollback of the voluntary supply curbs introduced to support crude prices.