The price of crude oil has shifted to bearish territory in light of softening demand, increased supply and evolving geopolitical risks.
Despite a brief lull following a ceasefire between the US and the Houthis, Yemen’s Houthi rebels have resumed attacking ships in the Red Sea. A recent incident tragically resulted in a ship sinking and two crew members losing their lives, followed by another attack on the “Eternity C” that killed three mariners and wounded two others as of today, July 8, 2025. If these attacks persist, vessels will be forced to take longer, more expensive routes around Africa, alongside facing higher insurance premiums.
The US had previously engaged the Houthis with airstrikes starting March 15th of this year, which led to a temporary halt in Houthi attacks and a cessation of US bombardment. However, this fragile peace has now been broken, with the Houthis claiming their renewed aggression is in response to Israeli strikes on Houthi targets. The European Union has strongly condemned the recent attacks, emphasizing the risk to maritime security and the potential for ecological disaster.
On the supply front, OPEC+ has decided to significantly boost oil output in August, signaling an accelerated unwinding of the 2.2 million barrels per day (bpd) production cuts initially implemented in 2023 to support prices. They plan an even larger increase of 550,000 bpd in September, defying analyst expectations. In essence, OPEC+ aims to restore the full 2.2 million bpd of production a year ahead of schedule. As a result, Saudi Arabia’s oil production has already jumped by 400,000 bpd.
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| Data Source: JODI |
Under the second Trump Administration, which began in 2025, there’s a strong commitment to keeping oil and gas prices low, regardless of climate change concerns. The US is actively encouraging both domestic and global oil and gas producers to increase output to achieve this goal. This includes steps towards reopening vast areas of public lands in Montana and Wyoming for new coal sales, a reversal of previous administration policies.
OPEC+ quickly recognized this new reality once President Trump took office, understanding that further production cuts to artificially inflate prices were off the table. The cartel’s new strategy is to secure market share as global supply is expected to increase, particularly if sanctions on Iran are lifted, which could add millions of barrels per day to the market with foreign investment.
Traders and investors largely believe that oil prices are unlikely to exceed $100 a barrel, predicted by some investment banks as well as those with vested interests, as long as President Trump is in office.
Today, July 8, 2025, further escalating tensions, a European Union naval force has confirmed that three mariners were killed and two wounded in a Houthi attack on the Liberian-flagged cargo ship “Eternity C” in the Red Sea. This comes just after the previous attack on the “Magic Seas,” solidifying fears of a renewed and more dangerous Houthi campaign against shipping in the vital waterway.
The European Commission has condemned the “Magic Seas” attack, highlighting the endangerment of crew and the risk of ecological disaster. Meanwhile, oil companies in the Philippines have announced price rollbacks today, attributing it to a decline in international oil prices following the ceasefire announcement in the Iran-Israel conflict.
