Oil crept higher as Saudi Arabia surprised customers in Asia by hiking prices for its main crude grade, signaling a vote of confidence that the market can absorb extra OPEC barrels.

OPEC oil output rose in June, a Reuters survey found, led by Saudi Arabia after an OPEC+ agreement to raise production, although the increase was limited as Iraq pumped below target to compensate for earlier overproduction.

Oil on Monday shrugged off the impact of OPEC+ hiking output more than expected for August as well as concern about the potential impact of U.S. tariffs, with prices reversing early losses as a tight physical market lent support.