Oil Prices Rebound as OPEC+ Production Changes, More Sanctions on Russia, and Economic Uncertainty

On Sunday, OPEC+ countries, along with Russia and other partners, agreed to increase their oil production starting in October.

Oil prices increased more than $1 on Monday, bouncing back from last week’s losses. The rise was helped by prospects of new sanctions on Russian crude, likely after a nighttime strike on Ukraine.

OPEC+ announced plans to gradually increase production starting in October, with the change expected to be modest. When they announced, Brent crude was up $1.24 to $66.74 a barrel, and US West Texas Intermediate rose $1.17 to $63.04 a barrel.

On Friday, both oil benchmarks reduced by more than 2%. It was after the US job report was released, which was reported as weak, that it affected the outlook for energy demand. For the week, the losses were more than 3%.

US job growth reduced sharply in August, and the unemployment rate rose to 4.3%, the highest level in almost four years. This raised concerns about the job market and increased the likelihood of a Federal Reserve rate cut.

The Labor Department’s employment report released on Friday also revealed that the economy faced many job losses in June for the first time in over four years, fueling fears about economic stagnation. Job growth has slowed since April. Economists blame this on President Donald Trump’s policies, including tariffs, stricter immigration rules, and mass layoffs in the public sector.

On Sunday, OPEC+ (the Organization of the Petroleum Exporting Countries), along with Russia and other partners, agreed to increase their oil production starting in October.

OPEC+ has been increasing its output since April, after years of cuts aimed at stabilizing the oil market. The latest decision comes despite experts’ expectations of an oil surplus this winter in the Northern Hemisphere.

Eight OPEC+ members will increase production by 137,000 barrels per day in October. It is a decrease from the increases of approximately 555,000 barrels per day in September and August, and 411,000 barrels per day in July and June.

Toshitaka Tazawa, an analyst at Fujitomi Securities, said the oil market was helped by OPEC+’s small output increase and a technical rebound after last week’s fall. He added that the market was expecting a reaction like this from OPEC+, and the possibility of new US sanctions on Russia is also supporting the prices.

US President Donald Trump stated on Sunday that he will enter the next phase of imposing sanctions on Russia. This is the closest indication that he may increase sanctions on Moscow or its oil buyers in response to the situation in Ukraine.

New sanctions on buyers of Russian oil could disturb crude shipments, according to Frederic Lasserre, the global head of research and analysis at energy trader Gunvor. Russia launched its largest airstrike against Ukraine, hitting the primary government building in central Kyiv, causing at least four fatalities, according to Ukrainian officials on Sunday.

Trump said European leaders would meet in the United States on Monday and Tuesday to talk about possible solutions to the Russia-Ukraine conflict. Satoru Yoshida, a commodity analyst at Rakuten Securities, explained that there was increased demand due to OPEC+ increasing its output less than expected. People are losing hope for creating peace in Ukraine, and many believe Russian oil will not flood the market, which is increasing the prices even higher.

Goldman Sachs stated in a note that it anticipates a larger oil surplus in 2026. More supply from the US will help offset the loss of Russian oil and higher global demand. The bank has maintained its 2025 price forecasts for Brent and West Texas Intermediate (WTI), predicting average prices of $56 and $52 per barrel for 2026.