Oil prices edged higher on Monday, driven by geopolitical tensions between the United States and Russia, despite the decision by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to increase oil output in September.
Brent crude, the international benchmark, rose 0.30% to $69.48 per barrel, while U.S. West Texas Intermediate (WTI) crude climbed 1.86% to $66.77, up from the previous close of $65.55.
The market’s reaction was influenced by rising friction between U.S. President Donald Trump and former Russian President Dmitry Medvedev, as well as provocative rhetoric involving nuclear submarines. These developments have reignited concerns over global energy security.
On Sunday, OPEC+ announced that eight member countries—Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman—would raise oil production by a combined 547,000 barrels per day (bpd) in September. This increase is part of a gradual rollback of 2.2 million bpd in voluntary output cuts that began in April. The group emphasized that this plan remains flexible and could be paused or reversed based on evolving market conditions.
Despite the additional supply, oil prices remained supported by tightening U.S. crude inventories and uncertainty surrounding global political developments.
“Tensions between Washington and Moscow are again shaping market sentiment,” said Daniel Hynes, senior commodity strategist at ANZ. “While the supply increase would typically pressure prices, geopolitical risks are keeping bullish sentiment alive for now.”
The Energy Information Administration (EIA) recently reported that U.S. crude inventories remain tight, adding to the upward pressure on prices. At the same time, weak U.S. job growth in July—only 73,000 new jobs versus expectations of over 150,000—has renewed expectations that the Federal Reserve may cut interest rates in September to stimulate the economy.
Lower interest rates typically weaken the U.S. dollar, making oil cheaper for buyers using other currencies and boosting demand.
Meanwhile, President Trump escalated rhetoric against Russia, announcing the deployment of two U.S. nuclear submarines in response to Medvedev’s veiled threat involving Russia’s Cold War-era “Dead Hand” nuclear response system. Medvedev had warned that Western pressure could push the Ukraine conflict into a broader confrontation involving the U.S.
In response, Trump shortened a previously announced 50-day deadline for Russia to end the war in Ukraine to just over a week, threatening new sanctions and secondary tariffs. He also took to Truth Social to warn Medvedev to “watch his words,” calling the Russian’s comments “highly provocative” and a threat to international security.
“These foolish and inflammatory statements cannot be ignored,” Trump said. “We’ve repositioned our forces just in case.”
Analysts warn that while global oil supply is increasing, political instability and military posturing could maintain volatility in the market.
“For now, geopolitical risks are balancing out the bearish fundamentals from supply growth,” said Hynes. “But if tensions escalate further, energy markets could see sharper price reactions in the coming weeks.”
