OPEC+ oil-producing countries are expected to agree to a modest boost in output targets for August when ministers convene on Sunday, industry reporting indicates. The planned adjustment would raise the group's official target by about 188,000 barrels per day for August, mirroring the incremental increases put in place for June and July.
The proposed change continues a trend among the group's core members. Seven principal OPEC+ participants have expanded their output quotas cumulatively from April through July by nearly 800,000 barrels per day, according to the reporting.
Production levels within the alliance have been volatile since the onset of the Iran war. That conflict prompted a substantial decline in output among key members, with OPEC+ production falling to 33.13 million barrels per day in May from 42.77 million barrels per day in February, based on OPEC data cited in the reporting.
Market dynamics have moved prices back toward pre-war levels. Several factors are cited for the downward pressure on oil prices: weaker import demand from China, increased exports from producers outside the Middle East, a record coordinated strategic stock release led by the International Energy Agency, and a U.S.-Iran memorandum of understanding intended to end the conflict that has lessened some supply concerns. At the same time, the Strait of Hormuz is reported to be reopening gradually, a development that also contributes to easing market tensions.
The contemplated August increase, if confirmed, would add supply against this backdrop of falling prices and improving physical access through a major maritime chokepoint. The decision would continue the pattern of sequential, relatively small quota rises implemented by core OPEC+ members over recent months.
Summary of developments:
- Planned August output target increase of about 188,000 barrels per day, consistent with June and July adjustments.
- Seven core OPEC+ members have lifted quotas from April to July by almost 800,000 barrels per day.
- OPEC+ reported output dropped to 33.13 million bpd in May from 42.77 million bpd in February amid the Iran war.
- Oil prices have reverted to pre-war levels amid weaker Chinese imports, greater non-Middle East exports, a record IEA-coordinated strategic release, and a U.S.-Iran memorandum of understanding to end the war; the Strait of Hormuz is reopening gradually.