Oil prices surge on renewed energy crisis, brent nears $85, OPEC crude production surges in June

Oil prices climbed nearly 2% on Tuesday as renewed US military action against Iran and heightened security concerns surrounding the Strait of Hormuz reinforced fears of supply disruptions, although expectations of tighter US monetary policy capped stronger gains just as Crude oil production by the Organisation of the Petroleum Exporting Countries (OPEC) rebounded in June after declining since March, rising by around 3.05 million barrels per day from the previous month.

In June, OPEC’s total output stood at about 22 million bpd, according to the group’s latest Monthly Oil Market Report on Monday.

The United Arab Emirates posted the largest monthly increase, with output rising by 1.642 million bpd to around 3.81 million bpd.

Kuwait’s production climbed by 880,000 bpd to 1.45 million bpd, while Iraq increased output by 446,000 bpd to 1.97 million bpd.

Production also rose in Iran, up 155,000 bpd to 2.44 million bpd, Libya, up 22,000 bpd to 1.32 million bpd, Gabon, up 10,000 bpd to 224,000 bpd, and Algeria and Nigeria, each up 5,000 bpd.

The largest decline came from Saudi Arabia, whose production fell by 99,000 bpd to around 6.85 million bpd, as production in Equatorial Guinea and Congo also declined, each by 7,000 bpd, to 44,000 bpd and 274,000 bpd, respectively. Venezuela’s output slipped by 1,000 bpd to 1.07 million bp.

Brent crude traded at $84.80 per barrel, up 1.8% from the previous close of $83.30. US benchmark West Texas Intermediate (WTI) traded at $79.57 per barrel, also up 1.8% from $78.14 in the previous session.

Brent briefly climbed above $85 per barrel during the session, its highest level in about a month, as investors assessed the potential impact of escalating tensions in the Gulf on global oil supplies.

US President Donald Trump said Monday that American forces were degrading Iran’s military capabilities related to the Strait of Hormuz and reinstating a naval blockade targeting the country, while maintaining that a diplomatic agreement with Tehran remained possible despite the escalating conflict.

His remarks came as the US carried out a third consecutive night of military strikes against Iran. The White House said the operations were intended to reduce Tehran’s ability to threaten commercial shipping and regional security in the Strait of Hormuz.

Iranian Foreign Minister Abbas Araghchi said Monday that Tehran would remain the “guardian” of the Strait of Hormuz after Trump threatened to impose fees on vessels using the strategic waterway.

Meanwhile, four people were injured after projectiles fired by US forces struck the southwestern Iranian city of Omidiyeh early Tuesday, according to a senior provincial official.

Valiollah Hayati, deputy governor of Iran’s Khuzestan province, said parts of Omidiyeh came under attack at around 2:10 a.m. local time (2240 GMT Monday), according to the state-run IRNA news agency.

“According to initial reports and assessments, four people have been injured in this attack,” Hayati said.

Earlier, the US Central Command (CENTCOM) said it had completed its latest round of strikes late Monday, targeting military facilities along Iran’s southern coast in an effort “to further degrade Iran’s ability to attack commercial shipping.”

Limiting further gains, Federal Reserve Governor Christopher Waller said additional monetary tightening could be considered if US core inflation data due later this week comes in stronger than expected.

Analysts said expectations that US interest rates could remain higher for longer may weigh on economic activity and fuel demand, tempering the rally in oil prices.

Crude oil production by the OPEC+ alliance, which includes OPEC members and several non-OPEC producers, increased by about 2.99 million barrels per day in June to average 36.28 million bpd.

OPEC slightly lowered its 2026 demand growth forecast while raising its 2027 outlook, although both projections continue to point to solid demand growth.

The group expects global oil demand to increase by 780,000 barrels per day (bpd) this year from 2025 to average 105.94 million bpd.

Demand in non-OECD countries is projected to rise by 740,000 bpd to 59.95 million bpd, while demand in OECD countries is expected to increase by 40,000 bpd to 45.99 million bpd. For 2027, OPEC forecasts global oil demand will grow by a further 1.94 million bpd to average about 107.88 million bpd.