OPEC+ announced on Sunday that it will raise its production targets again in August, increasing global supply at a moment when oil prices are already easing due to the gradual reopening of the Strait of Hormuz for oil shipments.
During an online meeting, the group approved an additional 188,000 barrels per day of output for August, following comparable increases implemented for June and July.
The seven core members of OPEC+, which unites OPEC with partners such as Russia, have boosted their production quotas by nearly 800,000 barrels per day from April through July.
However, much of that increase has remained theoretical because the US-Israeli war on Iran forced the closure of the Strait of Hormuz to tanker traffic, restricting exports from key OPEC+ countries like Saudi Arabia, Kuwait and Iraq.
According to OPEC data, the group’s output dropped to 33.13 million barrels per day in May, down from 42.77 million in February. Production started to recover in June as the United States helped the UAE and other OPEC+ members resume exports, but volumes remain below pre-war levels.
Even with ongoing supply constraints, oil prices have slipped back to pre-war levels, weighed down by weaker Chinese demand, higher output from non–Middle East producers, and a record release of strategic reserves coordinated by the International Energy Agency.
“The group of seven continued to roll back their production cuts as expected,” said UBS analyst Giovanni Staunovo. “In the near term, the key issue is how many tankers can transit the Strait of Hormuz and how quickly demand and Chinese crude imports rebound.”
A memorandum of understanding between Washington and Tehran aimed at ending the conflict has also reassured traders that supply conditions should eventually return to normal.
