Brent Crude Oil trade flat near $71.90 during the European trading session on Monday.
The Oil price is broadly under pressure as traffic near the Strait of Hormuz, a critical chokepoint for almost 20% of global energy supply, has increased amid the ongoing ceasefire between the United States (US) and Iran
Oil prices rallied significantly when the Middle East war started in late February, disrupting global oil supply. Still, prices have fallen significantly due to the resumption of shipping through Hormuz and the ceasefire framework reached between Lebanon, Israel, and the US. Meanwhile, the OPEC+ has also announced an increase in Oil supply, a scenario that will increase the overall availability of Oil in the global market.
Over the weekend, the OPEC and its allies (OPEC+), including Russia, agreed to raise their output targets by 188,000 barrels a day starting in August. Market experts have stated that signs of increasing overall crude oil supply could push oil prices below pre-Middle East war levels. Analysts at Citi have said in a note that Brent Crude Oil could slide further to $60 by the year-end, with fundamentals rapidly reasserting themselves as Hormuz disruptions fade and shipping flows are normalizing.