OPEC+ is poised to approve another modest uplift in its production ceiling for August, with member countries likely to raise output targets by 188,000 barrels per day, according to sources familiar with the discussions. The decision is expected to be taken at the producer group's meeting on Sunday.
The proposed adjustment would continue a pattern of gradual quota increases that the alliance put in place for June and July. Those earlier steps were part of a wider push to restore supply after months of disruption that followed a conflict which resulted in the closure of the Strait of Hormuz and constrained shipments from major producers.
Officials involved in preparatory talks have reached broad agreement on the August increase in advance of the online meeting, the sources said, but the outcome remains subject to formal sign-off.
The core seven members of OPEC+ - the Organization of the Petroleum Exporting Countries together with allies including Russia - have already approved nearly 800,000 barrels per day of higher production quotas between April and July. Despite those quota changes, actual output has lagged targets.
Export flows were severely disrupted when the Strait of Hormuz was closed during the conflict, limiting crude shipments from key producers including Saudi Arabia, Iraq, Kuwait, and the United Arab Emirates. Since then, production has started to recover after the vital shipping route reopened and a ceasefire agreement was reached last month. Even with that recovery, output remains below pre-conflict levels, according to OPEC's own data.
Oil prices have pulled back significantly from the peaks registered during the height of the conflict. Brent crude, for example, settled near $72 a barrel on Friday, down from levels above $120 reached at wartime highs. Market pressure has come from several fronts outlined by market participants: weaker crude import volumes into China, stronger production from non-Middle Eastern suppliers, and coordinated releases from strategic petroleum reserves by members of the International Energy Agency.
Investors and market participants will be watching Sunday’s OPEC+ decision closely for signals on how the group plans to balance the ongoing restoration of supply with evidence of slowing demand growth. The forthcoming vote will be interpreted for its implications on near-term output trajectories and price direction.
Contextual note - Ministers have reportedly reached broad agreement ahead of the online meeting, but the proposed increase remains subject to final approval.