OPEC+ production hike, new quotas loom
Crude oil production is likely to increase by 188,000 barrels per day.
Crude oil production is likely to increase by 188,000 barrels per day.
LONDON, United Kingdom (AFP) — Saudi Arabia, Russia and five other members of OPEC+ are expected to raise their oil production quotas for September when they meet online Sunday as the Middle East war continues to disrupt global energy supplies.
The enlarged Organization of the Petroleum Exporting Countries (OPEC) will likely increase production by 188,000 barrels per day, following several months of similar hikes, said Jorge Leon, an analyst at Rystad Energy.
However, the September increase is likely to be the last in the current series of production adjustments, he said.
Between late 2022 and 2023, OPEC+ became concerned that oil prices were falling, and agreed to cut oil production in three separate rounds, reducing total output by nearly six million barrels per day.
But Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, Oman and the United Arab Emirates — before their exit from the group on 1 May — then changed their strategy by gradually upping production starting in 2025.
A September increase would complete the unwinding of the second of the three production-cut packages introduced by OPEC+.
However, in reality, many OPEC+ members cannot produce as much oil as their official targets allow due to a "decline in production capacity," so increasing targets has become less meaningful, said Giovanni Staunovo, an analyst at UBS.
The Gulf countries have struggled to increase exports due to the near-paralysis of the Strait of Hormuz orchestrated by Iran during the war in the Middle East — despite a brief upswing in shipping traffic after a United States-Iran memorandum of understanding was signed in June.
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