Global oil prices recovered on Monday after OPEC+ decided on a modest production hike for October, easing some of last week’s losses. Investors also reacted to the possibility of tougher U.S. sanctions on Russian oil exports, which could impact future supply.

According to market reports, Brent crude settled up by 52 cents (0.79%) at $66.02 per barrel, while U.S. West Texas Intermediate (WTI) closed up by 39 cents (0.63%) at $62.26 per barrel. Earlier in the day, both benchmarks had climbed by over $1, but the gains slowed by market close.

Why Oil Prices Rose After OPEC+ Meeting

The latest OPEC+ decision surprised many analysts who expected a larger supply increase. Instead, the group agreed to raise production by 137,000 barrels per day (bpd) in October. This is significantly lower than previous monthly hikes of 555,000 bpd in August and September, and 411,000 bpd in July and June.

Experts believe this cautious move reflects the group’s new strategy. According to Claudio Galimberti, Chief Economist at Rystad Energy:

“Riyadh and its allies signalled a decisive pivot: defending market share now outweighs defending prices.”

This means Saudi Arabia and its partners are now more focused on keeping their global buyers rather than pushing prices higher.

Market Context: Oversupply Risks and Compensation Plans

The modest increase comes at a time when some OPEC+ members have been overproducing, meaning extra barrels are already in circulation. To balance this, OPEC published a compensation schedule requiring six member countries to cut back production by 190,000 to 829,000 bpd monthly until June next year.

Analysts suggest the overall impact of the October hike will be relatively small, as much of the “new” supply is already present in global markets.

Russia Sanctions Loom Large

Another key factor driving oil prices higher is the possibility of new U.S. sanctions on Russian oil. Over the weekend, former U.S. President Donald Trump suggested moving into a second phase of sanctions against Moscow and its oil buyers.

Analysts say this could significantly tighten global supply if implemented. Energy trader Gunvor’s head of research, Frederic Lasserre, warned that restrictions on Russian crude buyers could disrupt flows across Europe and Asia.

The timing is sensitive, as Russia just launched its largest airstrike on Ukraine, escalating tensions further.

Oil Price Outlook

Despite these developments, some analysts believe the impact may be limited in the long term. Goldman Sachs recently forecasted a slightly larger oil surplus in 2026, driven by supply growth in the Americas. However, for now, Brent and WTI price forecasts remain unchanged for 2025.

Ole Hansen, Head of Commodity Strategy at Saxo Bank, described the current price action as a “sell the rumour, buy the fact reaction.” He noted that markets had already priced in a larger OPEC+ increase, so the smaller hike triggered a rebound.

Conclusion

The latest OPEC+ move to modestly raise oil output reflects a delicate balance between managing oversupply and maintaining global market share. While prices rose slightly, the fundamental factor to watch is the potential new U.S. sanctions on Russian oil, which could reshape the supply-demand outlook in the months ahead.

For now, oil traders, investors, and energy companies remain cautious, watching closely how both the OPEC+ strategy and geopolitical risks will play out.