Eight oil-producing countries from the OPEC+ alliance — including major players like Saudi Arabia and Russia — have agreed to increase their collective crude oil production by 548,000 barrels per day starting in August. This move significantly exceeds their earlier anticipated hike of 411,000 barrels per day.
The decision was made during a virtual meeting attended by Algeria, Iraq, Kazakhstan, Kuwait, Oman, and the United Arab Emirates, in addition to Russia and Saudi Arabia. This increase marks a continued shift away from earlier voluntary production cuts.
Favorable Market Outlook Prompts OPEC+ to Reverse Cuts and Increase Oil Output
The OPEC Secretariat explained that the production boost was prompted by favorable market conditions. A steady global economic outlook and low oil inventories are among the key reasons cited. These factors suggest a strong demand recovery and a balanced market, encouraging the alliance to accelerate their output restoration plans. The increased production is also seen as a strategic step to stabilize global energy markets amid shifting geopolitical and seasonal demand patterns.
OPEC+ Boosts Oil Output by 548K Barrels Daily as Demand Surges and Cuts RecedeThese eight producers have been following two separate sets of voluntary output cuts beyond the official OPEC+ framework. One reduction, totaling 1.66 million barrels per day, is planned to continue through the end of 2026. The second, a more short-term reduction of 2.2 million barrels per day, was implemented until the end of the first quarter. These cuts were originally put in place to support oil prices during market downturns, but are now being gradually reversed as demand strengthens.
OPEC+ Accelerates Output Amid Demand Surge and Geopolitical Supply Disruption Concerns
Initially, the group aimed to increase production modestly by 137,000 barrels per day each month until September 2026. However, they only maintained this pace in April before deciding to triple the monthly increase to 411,000 barrels for May, June, and July. With August’s increase now reaching 548,000 barrels per day, the group is clearly accelerating its plan to restore oil output at a faster rate in response to market needs and economic recovery trends.
Oil prices experienced a short-lived boost recently, driven by both seasonal summer demand and geopolitical tensions — particularly the 12-day conflict between Israel and Iran, which threatened Iranian oil supplies and raised concerns about shipments through the vital Strait of Hormuz. Despite this, oil futures closed lower at the end of last week: Brent crude for September delivery settled at $68.30 per barrel, while U.S. West Texas Intermediate for August ended at $66.50. These price points reflect the delicate balance between supply increases and market uncertainties.
