OPEC+ Expected to Approve Fresh Oil Output Hike for August

OPEC+ is expected to approve another increase in production targets at its Sunday meeting, raising output by 188,000 barrels per day (bpd) from August as the group continues restoring supply following recent disruptions to regional energy markets.

Fundamental Drivers

The planned hike would extend similar quota increases already implemented for June and July. Sources familiar with the discussions said ministers had reached broad agreement ahead of the online meeting, though a final decision remained pending. The seven core OPEC+ members, including Russia, have already agreed to lift quotas by nearly 800,000 bpd between April and July.

Actual production has lagged behind targets, however. Shipping through the Strait of Hormuz was significantly disrupted during the recent regional conflict, limiting exports from Saudi Arabia, Iraq, Kuwait and the UAE. Output has since begun recovering following improved shipping conditions and last month's ceasefire, though volumes remain below pre-disruption levels, according to OPEC data.

Prices have also retreated sharply from recent conflict-driven highs as supply disruption concerns eased, compounded by weaker Chinese crude imports, rising output from non-Middle Eastern producers, and coordinated strategic petroleum reserve releases by major economies.

Market Reaction

Brent crude settled near $72 a barrel on Friday, down significantly from peaks above $120 reached during the height of the recent regional conflict.

What's Next

Markets will watch Sunday's OPEC+ decision for further signals on how the group plans to balance recovering supply with slowing global demand growth.