Crude oil prices surged after OPEC+ announced a sharp production increase of 411,000 barrels per day for July, marking the third consecutive month of supply hikes aimed at regaining market control and pressuring U.S. shale producers.

The move, confirmed Saturday by the Organization of the Petroleum Exporting Countries and its allies, is designed to discipline nations over-producing oil, such as Iraq and Kazakhstan, while helping Saudi Arabia reclaim lost market share.West Texas Intermediate futures jumped more than 2% late Sunday, reflecting market anticipation.

However, analysts say the increase was largely priced in already.Stephen Innes, managing partner at SPI Asset Management, noted, “Oil is trading as if it has just remembered that geopolitics exists.”

He added, “Moscow has been provoked on a strategic level, and markets should brace for a forceful Russian retaliation.”OPEC+ had previously cut production by 2.2 million barrels daily starting January 2024 to stabilize markets but has since reversed course by gradually ramping up output from April and accelerating production boosts in May and now July.

The group reaffirmed its “commitment to market stability on current healthy oil market fundamentals and steady global economic outlook.” Still, the production surge threatens U.S. drillers, who face high costs amid falling prices.

Innes commented on the cartel’s strategy: “If Riyadh’s playing the long game, they’re betting the price dip today is the cost of cartel control tomorrow.

“Despite the hike, some analysts foresee crude prices dropping up to 10% as supply grows. Jeffries analysts noted the market might instead focus on risks like supply disruptions in Libya and Canada or geopolitical tensions linked to Iran.OPEC+ is set to meet again on July 6 to decide August production levels.