LONDON—Oil prices fell by more than 2 percent on Monday on sharp price cuts by top exporter Saudi Arabia and a rise in OPEC output, offsetting supply concerns generated by escalating geopolitical tension in the Middle East.

Brent crude slid 2.2 percent, or $1.74, to $77.02 a barrel by 1024 GMT while U.S. West Texas Intermediate crude futures shed 2.3 percent, or $1.73, to $72.08.

Both contracts climbed more than 2 percent in the first week of 2024 on intensifying geopolitical risk in the Middle East after attacks by Yemeni Houthis on ships in the Red Sea.

On Sunday rising supply and competition with rival producers prompted Saudi Arabia to cut the February official selling price (OSP) of its flagship Arab Light crude to Asia to the lowest level in 27 months.

“Oil watchers are rightly questioning that the kingdom’s cut is not only aimed at quelling interference from non-OPEC supply but from its very own cartel membership,” said John Evans, of oil broker PVM.

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