OPEC+ is likely to discuss a slight rise in oil production quotas for August as they continue to reverse previous supply cuts. Delegates suggest that seven key producers, including Saudi Arabia and Russia, have tentatively agreed on a proposal ahead of a virtual meeting.
If approved during the video conference, the suggested increase would boost the total production target of these major producers by 188,000 barrels per day. This move aligns with the group’s plan to gradually ease production restrictions put in place in 2023 to stabilize oil prices.
The latest adjustment would mark a total addition of around 940,000 barrels per day since the policy shift began, roughly 1% of global oil demand. Recent peace developments between the US and Iran have enabled major Gulf producers like Saudi Arabia and the UAE to restore exports and output.
Saudi Arabia and the UAE have nearly restored oil exports to pre-conflict levels, aided by improved shipping access through the Strait of Hormuz. The surplus in key Asian markets due to the return of additional supplies has led to intensified competition among OPEC producers for market share.
The decision on production levels comes amid internal challenges within OPEC+. Iraq and the UAE have expressed concerns over production quotas, with Iraq hinting at a possible exit from the group. The August increase, if finalized, would be a step towards fully reversing the production cuts implemented in 2023, with one more increase expected in September to complete the process.
