Experts discussed with Sputnik the dimensions of tensions in the Red Sea and their impact on oil prices amid the region’s security instability. Dr. Imad Akouch, a Lebanese economic expert, stated that following the OPEC+ decision to cut production, Brent crude futures prices dropped by about 1% to $69.02 per barrel. This decline came after the OPEC+ alliance announced a new production increase of 547,000 barrels per day in September to regain the market share for the OPEC+ group. He added in his conversation with Sputnik that the group indicated their decision is based on the strength of the global economy and low inventory levels. However, in principle, when OPEC+ increases its production, the market supply rises, and if the information provided by the group is inaccurate, prices tend to decrease.
According to data from the U.S. Energy Information Administration, crude oil inventories decreased by 3.2 million barrels for the week ending July 18 of this year. Additionally, the expected global economic growth rate for July, issued by the International Monetary Fund, increased to 3% from 2.8% in April, supporting the idea of increased production.
Regarding the implications of Red Sea tensions, Akouch believes this supports the idea of raising production, especially since the Red Sea is a vital passage for oil and gas, passing through the Suez Canal and Bab el-Mandeb. This means that ongoing or escalating threats from Yemenis or disruptions to navigation increase shipping costs and geopolitical risks, potentially leading to a gradual rise in prices or at least preventing their decline despite increased supply from OPEC+.
He added in his conversation with Sputnik that OPEC+ announced gradual production increases to regain some of its market share, but this has not significantly impacted prices so far because the security situation remains unstable. He continued: ‘The Red Sea has become a very sensitive area, and any threat or attack there immediately affects ship movements and, consequently, oil prices. Today’s market is not just driven by numbers but also by fears of sudden developments.’
He concluded by saying: ‘Overall, the market is experiencing continuous tension, and any small change could cause significant fluctuations. It is clear that politics and economics together have become the main drivers of oil prices in the current phase.’
OPEC announced that 8 countries in the OPEC+ alliance decided to increase production by 547,000 barrels per day starting in September 2025, with the possibility of suspending or cancelling the decision depending on market developments. Russia will increase its oil production to 9.449 million barrels per day, Saudi Arabia to 9.978 million barrels, Iraq to 4.22 million barrels, the United Arab Emirates to 3.375 million barrels, Kuwait to 2.548 million barrels, and Kazakhstan to 1.55 million barrels. These goals do not reflect the compensation mechanism, according to the statement.
