Brent crude prices were little changed on Monday, hovering near the $85-a-barrel mark, after OPEC+ approved a production quota increase of about 188,000 barrels per day (bpd) from September, completing the rollback of a key layer of voluntary supply cuts introduced in 2023.
The increase, agreed by Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman, marks the end of the phased reversal of a 1.65 million bpd voluntary production cut. However, the latest hike is expected to have a limited immediate impact on global supply, as export disruptions from the Gulf, Russia and Kazakhstan due to the Iran and Ukraine conflicts have kept much of this year's planned output increases largely on paper.
While market participants had expected OPEC+ to pause further production increases in the fourth quarter, the group's statement made no mention of output policy beyond September.
Jorge Leon, an analyst at Rystad, told CNBC that OPEC+ has now shifted its focus from restoring supply to managing a potential surplus.
"OPEC+ has finished unwinding its voluntary cuts. The next challenge is managing the surplus that could emerge as export flows normalise."
"Having completed the restoration campaign, OPEC+ has little incentive to rush into further supply changes. Our base case is a fourth-quarter pause while the group prepares for the 2027 quota negotiations."
Oil prices had rallied more than 1% in the previous session, with Brent settling at $90.12 a barrel and US WTI crude closing at $84.67.
For India, which imports more than 85% of its crude oil requirement, sustained elevated oil prices could significantly increase the country's import bill and fuel inflationary pressures. Higher crude prices also raise the likelihood of increased domestic fuel costs, which have already seen multiple hikes in recent months.
Petrol Prices On August 3
Petrol price in Delhi: Rs 102.12/litre
Petrol price in Kolkata: Rs 113.43/litre
Petrol price in Mumbai: Rs 111.12/litre
Petrol price in Chennai: Rs 107.75/litre
Petrol price in Hyderabad: Rs 115.74/litre
Petrol price in Bengaluru: Rs 110.93/litre
Diesel Prices On August 3
Diesel price in Delhi: Rs 95.20/litre
Diesel price in Kolkata: Rs 99.78/litre
Diesel price in Mumbai: Rs 97.78 litre
Diesel price in Chennai: Rs 99.57/litre
Diesel price in Hyderabad: 103.9/litre
Diesel price in Bengaluru: 98.79/litre
What Drives Petrol, Diesel Prices?
Global crude prices remain the biggest determinant of retail fuel prices in India, but they are far from the only factor.
Domestic petrol and diesel rates are also influenced by central and state taxes, refining margins, freight and distribution costs, as well as movements in the rupee against the US dollar.
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