Oil prices slide as US-Iran tensions ease

OPEC+ is widely expected to approve another increase in oil production when its members meet virtually on Sunday, as the alliance continues to adjust supply while global energy markets remain affected by ongoing geopolitical tensions. According to market analysts, Saudi Arabia, Russia and several other key members of the alliance are likely to raise their combined production target by around 188,000 barrels per day for September. If approved, the increase would continue a series of monthly production hikes introduced this year and is expected to mark the final step in the group’s current plan to gradually restore previously reduced output. OPEC+, which includes members of the Organization of the Petroleum Exporting Countries and allied producers, introduced major production cuts between late 2022 and 2023 after concerns that falling oil prices could weaken global energy markets. Those reductions removed nearly six million barrels of oil per day from the market in three separate phases. As demand gradually recovered, the group shifted its strategy by slowly increasing production, beginning in 2025, to balance supply while supporting market stability. A September increase would complete the reversal of the second package of production cuts introduced during that period. However, analysts note that higher production targets do not necessarily mean actual oil output will increase by the same amount. Several member countries are currently unable to reach their assigned quotas because of declining production capacity, ageing infrastructure or operational challenges. Energy analyst Giovanni Staunovo of UBS said many producers are already pumping below their official targets, making further quota increases less significant in practical terms. He noted that production capacity has declined in several member states, limiting their ability to take full advantage of higher output allowances. Regional tensions have also affected oil exports. Gulf producers continue to face challenges because shipping through the Strait of Hormuz has been disrupted during the conflict involving Iran. Although maritime traffic briefly improved after a memorandum of understanding between the United States and Iran was signed in June, transport through one of the world’s busiest oil routes remains uncertain. Russia is also dealing with production difficulties as repeated Ukrainian drone attacks have targeted parts of its energy infrastructure. Current Russian oil production remains close to nine million barrels per day, well below its official production target of 9.8 million barrels per day, highlighting the gap between quotas and actual output. Some OPEC+ members, including Iraq, have indicated they want to increase production significantly once conditions allow. At the same time, the alliance is reviewing the maximum sustainable production capacity of each member to help determine future output allocations. These discussions are expected to play an important role in setting production quotas for 2027 and beyond. Analysts believe negotiations over future production targets could become more challenging after the September meeting. While they say the alliance remains united for now, the departure of the United Arab Emirates from OPEC+ earlier this year has raised questions about the group’s long term cohesion. The UAE said its decision to leave was based on national interests and long term strategic goals, pointing to major investments aimed at expanding its oil production capacity beyond the limits previously set by the alliance. Despite these challenges, OPEC+ is expected to continue coordinating production policies in an effort to maintain stability in the global oil market as economic uncertainty and geopolitical tensions continue to influence energy demand and supply.

A powerful earthquake struck Colombia and several other parts of Latin America on Monday, causing injuries, damaging buildings and forcing evacuations in the capital, Bogota. The earthquake was recorded at different magnitudes by geological agencies. Colombia’s geological service measured it at 6.6, while the United States Geological Survey estimated its magnitude at 7.4. The epicentre was located in western Colombia at a depth of around 100 kilometres. Strong tremors were felt across large areas of the country. The shaking was also reported in neighbouring Ecuador and as far north as Panama. In Bogota, residents rushed out of buildings as emergency sirens sounded. Some people were seen gathering in the streets after leaving their homes and workplaces. Authorities ordered evacuations from a number of buildings as a precaution while emergency teams assessed possible structural damage. The situation was particularly serious in the western parts of Colombia. The governor of Choco province reported injuries and significant damage to buildings in Quibdo, the provincial capital. Cali, one of Colombia’s largest cities, also suffered substantial damage. Mayor Alejandro Eder said at least 20 buildings had collapsed and that people were believed to be trapped inside some of the structures. Rescue operations were launched in the affected areas. Cali authorities requested additional emergency teams from Bogota and Medellin to assist with search and rescue efforts. Images broadcast by local media showed buildings with damaged facades and sections of structures affected by the powerful tremors. Emergency authorities continued to assess the extent of the destruction as rescue teams searched damaged buildings for survivors. Officials have not yet released a complete account of casualties or property losses. The number of injured people is expected to change as assessments continue. The depth and strength of the earthquake allowed tremors to be felt across a wide area, including outside Colombia. Authorities urged residents to remain cautious and follow instructions from emergency services, particularly in buildings that may have suffered structural damage. The earthquake comes as parts of northern South America remain vulnerable to major seismic activity. In June, two powerful earthquakes struck Venezuela, with reported magnitudes of 7.2 and 7.5, causing widespread destruction and thousands of deaths.