Seven OPEC+ countries will reconvene on August 2 to determine September production targets, with the group expected to maintain the same 188,000-barrel-per-day increase it has applied for each of the past five months. [1]
The decision, first finalized during a virtual meeting on July 5, marked the fifth consecutive monthly increase as the group continues unwinding the 1.65 million barrel-per-day cut announced in April 2023. [1] Saudi Arabia and Russia each absorb 62,000 barrels of the increase; Iraq accounts for 26,000; Kuwait 16,000; Kazakhstan 10,000; Algeria 6,000; and Oman 5,000. [2]
The August meeting arrives against a backdrop of falling crude prices. Brent slid below $80 per barrel as de-escalation expectations ahead of the ceasefire negotiations weighed on markets. [1] The price decline reflects the gap between physical supply disruption — the Strait of Hormuz remains below pre-war shipping levels — and the market's forward-looking bet on normalization.
OPEC's own output data confirms that the Strait of Hormuz disruption reduced combined production of Saudi Arabia, Iraq, and Kuwait by approximately 6 million barrels per day between the first quarter and May. [1] A memorandum of understanding signed June 17 between Iran and the United States opened a 60-day negotiation period, during which oil supply transiting the strait has exceeded 10 million barrels per day according to one U.S. official cited by Bloomberg. [1]
But analysts caution that the recovery remains partial. "Production is likely still below" OPEC+ targets, UBS analyst Giovanni Staunovo told energynews.pro. [1] Saxo Bank's Ole Hansen noted that volumes currently in circulation partly stem from pre-existing stockpiles, not fresh production. [1]
The meeting's real test is whether the group pauses or reverses its output trajectory in response to ceasefire progress. Rystad Energy's Jorge Leon estimated that "everyone is expecting a production surplus," which would expose prices to sustained downward pressure. [1]
Iraq has requested that OPEC raise its quotas to compensate for revenue lost during the Middle East war, but Hansen argued the request could be deferred to 2027 as production capacity remains far from pre-conflict levels. [1]
The seven participating countries — Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman — will hold monthly meetings to monitor market developments, compliance levels, and compensation plans for overproduction since January 2024. [2]
The United Arab Emirates formally exited OPEC+ on May 1 to align its expanding domestic capacity with output, leaving the group without one of its largest producers. [2]
-- PRIYA SHARMA, Delhi