OPEC+ is expected to approve another increase in oil production targets during its meeting on Sunday. The move could boost global supply as oil prices remain under pressure. Market expectations have also improved following the gradual reopening of the Strait of Hormuz.
OPEC+ Plans Higher Production for August
Sources familiar with the discussions said OPEC+ has agreed in principle to raise output targets from August. The proposed increase amounts to 188,000 barrels per day. It follows similar production hikes approved for June and July.
Seven key OPEC+ members have already increased production quotas between April and July. These countries include major producers from OPEC and allied nations, including Russia. Combined quota increases have reached nearly 800,000 barrels per day.
However, actual production has remained below planned levels. Earlier disruptions linked to the conflict involving Iran restricted tanker movement through the Strait of Hormuz. Consequently, exports from major producers, including Saudi Arabia, Kuwait, and Iraq, were affected.
Oil Prices Face Pressure Despite Supply Disruptions
According to OPEC data, the group’s production stood at 33.13 million barrels per day in May. This marked a significant decline from 42.77 million barrels per day recorded in February. Nevertheless, output began recovering during June.
The recovery followed efforts to improve export routes for several Gulf producers. Despite lingering supply challenges, oil prices have returned to levels seen before the conflict. Lower Chinese imports and increased exports from non-Middle Eastern producers have weighed on prices.
Additionally, the International Energy Agency coordinated a record global strategic oil stock release. Meanwhile, the memorandum aimed at ending the conflict has improved market confidence. As a result, traders increasingly expect global oil supplies to normalize in the coming months.
