OPEC+ makes small oil quota hike to finish unwinding 2023 oil cuts
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An eventual oil supply boost by OPEC, of which Iraq is a member, and its partners could help to rekindle a temporary surplus that emerged during July’s US-Iran ceasefire.
PHOTO: AFP
- OPEC+ has agreed in principle to a small oil production increase of 188,000 barrels a day for September, led by Saudi Arabia and Russia.
- The quota hike is symbolic now but allows Saudi Arabia to raise output when Middle East oil flows normalise, easing global supply.
- Conflicts have tightened supplies and raised fuel costs, but potential future boosts could restore surplus levels seen during July's US-Iran ceasefire.
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Major OPEC+ nations approved the latest small increase to their production quotas, a move that will complete the theoretical revival of supplies halted in 2023 and give them scope to add more barrels once the Middle East war ends.
Seven members led by Saudi Arabia and Russia agreed to boost their collective target by a further 188,000 barrels a day in September, the group said following a video call on Aug 2.
The group of oil-producing countries has raised quotas each month throughout the Iran war even as supply from the region remains constrained by the conflict.
Bloomberg reported last week that OPEC+ currently plans to hold levels steady for the rest of 2026 after the September hike.
While the increase is symbolic for now, it may give Saudi Arabia leeway to raise production once oil flows from the Persian Gulf return to normal, helping to replenish the world’s depleted stockpiles.
A supply squeeze triggered by conflict is pushing up the cost of fuels like petrol and diesel, stoking fears of another spike in inflation.
President Donald Trump said this weekend the US will hold off new strikes against Iran after the Islamic Republic and other Middle Eastern nations told him they were working towards a deal.
An eventual supply boost by the Organization of the Petroleum Exporting Countries and its partners could help to rekindle a temporary surplus that emerged during a ceasefire between the US and Iran in July, an oversupply some forecasters anticipate returning later in 2026.
The exit of the United Arab Emirates in May, following years of frustration with OPEC-imposed limits, has also spurred speculation the group could one day be plunged into a contest over market share.
The group will continue to hold monthly meetings, with the next one scheduled for Sept 6. BLOOMBERG
