OPEC+ agrees to 4th consecutive output increase of 188,000 bpd

Seven members of OPEC+, the alliance of the Organization of the Petroleum Exporting Countries and allied producers, agreed to expand oil output targets for a fourth consecutive month, Reuters and other outlets reported Sunday.

Energy ministers from Saudi Arabia, Russia and five other member states announced after a video conference that day that they had decided on a production adjustment of 188,000 barrels per day, unwinding part of the voluntary additional output cuts announced in April 2023. The increase takes effect in July.

Eight countries — Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman — have been gradually reversing voluntary cuts decided in two rounds in 2023, lifting output targets since last year.

The group paused increases in the first quarter of this year before resuming in April, following the outbreak of the Iran war and the closure of the Strait of Hormuz, a key oil shipping lane. It has now agreed to raise output for four consecutive months.

The monthly increase has narrowed from 206,000 barrels per day in April and May to 188,000 barrels per day in June and July, reflecting the UAE's departure from OPEC in late April.

OPEC+ has raised monthly quotas to stabilize markets after the closure of the Strait of Hormuz sent oil prices sharply higher, but actual production has been falling.

Gulf state crude output in April was 14.4 million barrels per day lower than pre-war levels, according to the International Energy Agency. Global crude supply had exceeded 100 million barrels per day before the war.

"It's not the quotas that are missing — it's the physical crude reaching the market," said Jorge Leon of consultancy Rystad Energy. "The 188,000-barrel-per-day increase is closer to a policy signal than a real supply expansion."