Oil prices climbed about 3% on Monday after surprise Ukrainian drone strikes damaged Russian military bombers at air bases. The attacks created a short-term geopolitical shock that briefly outweighed OPEC+’s recent choice to raise production by 411,000 barrels per day starting in July — marking the group’s third consecutive month of output increases.
Since January 2024, OPEC+ has restored roughly 1.37 million barrels per day of the 2.2 million barrels per day it initially cut. Still, many analysts caution that the recent price surge is unlikely to be sustained. They describe the move as a temporary relief rally driven by conflict-related supply concerns rather than by fundamental improvements in the market.
Underlying market conditions remain soft, with persistent oversupply and lackluster demand keeping pressure on prices. Despite Monday’s uptick, both WTI and Brent crude continue to trade close to three-week lows, reflecting ongoing doubts about the durability of any recovery without a meaningful tightening of supply or a pickup in consumption.
Market participants will be watching for further developments on the geopolitical front and for economic indicators that might signal stronger demand. In the near term, oil prices are likely to remain sensitive to episodic events and headlines, while broader trends will depend on whether OPEC+ production increases and global demand dynamics shift enough to rebalance the market.