Oil production by OPEC+ to be boosted from July onwards
OPEC+ Expands Oil Output for Third Consecutive Month
VIENNA (dpa) - The leading oil-producing alliance OPEC+ is set to escalate its output volumes this summer. The group, consisting of key figures such as Saudi Arabia and Russia, alongside Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman, will enhance their joint daily production by 411,000 barrels (each approximately 159 liters) in July, as announced following an online gathering of the union.
The decision was rationalized as a response to "reassuring global economic predictions and robust market fundamentals," the union disclosed in a statement. Over the past few months, the group had previously agreed to an increase of 411,000 barrels for both May and June. The latest expansion, expected by the markets, is unlikely to make a significant impact on oil prices, reported analysts at Commerzbank prior to the decision.
As of the latest data from the union, OPEC+ accounts for around 40 percent of global oil production, producing about 40.9 million barrels per day in April. In recent years, the core members of the cartel have diminished their production by 2.2 million barrels (each approximately 159 liters). Since April, the group has initiated a slow rollback of these cuts.
According to the deal, the members will compensate for overproduced quotas with monthly reduction cuts. These cuts, ranging from 189,000 to 435,000 barrels, are scheduled to be in effect until June 2026. The goal is to foster compliance within the group.
The move is seen as an attempt to recapture market share, particularly from U.S. shale producers and other high-cost competitors. The increased supply is offering some relief for consumers and central banks facing inflation, yet it poses financial risks for oil producers worldwide, who may have to endure prolonged periods of lower prices.
OPEC+ remains cautious with its policy shifts, choosing to exercise flexibility in its strategy, with monthly reviews and possible pauses or reversals based on evolving market conditions.
[1]: OPEC+ Expands Oil Output in Response to Global Economic and Market Fundamentals[2]: OPEC+ Increases Production to Recapture Market Share and Counter Inflationary Pressures[3]: OPEC+ Agrees to Additional Oil Output Increase for July 2025[4]: OPEC+ Sets Gradual and Flexible Production Increase Plan[5]: OPEC+ Contemplates Adjusting Strategy Monthly in Response to Market Conditions
- The expansion of OPEC+ oil output signifies a strategic move within the energy industry, aimed at addressing robust market fundamentals and global economic predictions.
- The decision by OPEC+ to intensify oil production is not only a response to increasing competition within the finance sector, but also a step towards offering relief for consumers challenged by inflationary pressures.
