Oil prices fell on Tuesday as a result of concerns about oversupply and concerns about demand

Global oil markets witnessed a noticeable decline in prices over the weekend, as WTI crude fell to the level of 66 dollars per barrel, influenced by the OPEC alliance's decision to increase production, while trading on Tuesday witnessed slight fluctuations between ups and downs.

Oversupply increases pressure on prices

The OPEC alliance, which includes the organization of the Petroleum Exporting Countries (OPEC) and its allies, announced an increase in oil production by 547 thousand barrels per day starting next September.

This decision is a complete reversal from a large part of the previous production cut of 2.5 million barrels per day, equivalent to about 2.4% of global demand.

Although this step is aimed at compensating for the possible shortage of supplies, especially with the US threats to impose restrictions on Russian oil exports, analysts doubt the ability of these volumes to fully compensate for the gap, as the actual volumes returning to the market may be less than announced.

Demand fears increase challenges

In addition to fears of oversupply, oil markets are under pressure due to expectations of a decline in global demand, amid warnings of a slowdown in economic growth during the second half of the year.

The recent statements of US President Donald Trump about imposing additional tariffs of 100% on Russian oil buyers such as India, have also raised new fears of worsening trade tensions and their impact on global trade.

India, one of the largest importers of Russian oil, responded by announcing its rejection of these measures and promising to protect its economic interests, threatening to escalate the dispute between the two countries.

The data shows that India imported about 1.75 million barrels per day of Russian oil in the first half of the year, slightly more than last year.

Future prospects amid tensions and slowing growth

We are waiting for developments in US policies, especially after the imposition of 25% tariffs on Indian imports last July, which may affect the movement of trade and global economic growth.

Under these circumstances, the future of oil prices remains tied to an unstable balance between increased supplies and weak demand, which may push prices to further fluctuations in the coming period.