Oil prices experienced volatility in late June and early July 2025 amid shifting geopolitical and supply dynamics. Prices initially fell due to easing tensions in the Middle East and expectations of increased supply from OPEC+. The Organization of the Petroleum Exporting Countries and allies (OPEC+) surprised markets by announcing an August production increase of 548,000 barrels per day, exceeding prior estimates of 411,000 barrels per day. Despite concerns about oversupply and weak demand, oil prices rebounded as strong physical market fundamentals, including refinery demand and inventory drawdowns, supported prices. Traders also weighed the impact of renewed US tariff threats from President Donald Trump and regional risks following Houthi attacks near Yemen, which raised shipping risks in the Red Sea. Market participants largely focused on immediate demand strength and Saudi Arabia's optimistic pricing outlook, which helped offset the pressure from the larger-than-expected OPEC+ output hike. Overall, oil prices remained relatively steady with some downward pressure amid ongoing supply concerns and geopolitical uncertainties.