OPEC+ has approved a further increase of 188,000 barrels per day (bpd) in oil production targets from August, continuing similar output hikes introduced in June and July. The decision is expected to add more supply to the global market as oil prices ease.
The latest increase comes as the Strait of Hormuz gradually reopens to oil exports after disruptions caused by the recent U.S.-Israeli conflict with Iran. Despite higher production quotas, actual output has remained below target because exports from key producers were affected during the crisis.
According to OPEC data, the alliance’s production dropped significantly in May before recovering slightly in June as exports resumed. However, output remains below pre-war levels.
Analysts said the market is now focused on how quickly tanker movements through the Strait of Hormuz normalise and whether demand, particularly from China, improves in the coming months.
Oil prices have fallen back to around $72 per barrel after earlier surging above $120 during the conflict, supported by expectations that supplies will stabilise following a U.S.-Iran understanding to end hostilities.
The alliance is also adjusting to changes within its membership after the United Arab Emirates exited the group and Iraq sought higher production quotas.
With the August increase approved, the seven core OPEC+ producers are close to fully reversing the production cuts introduced in 2023, with one more similar increase expected to complete the process at their next meeting in August.
