OPEC+ will significantly increase oil production in August, extending its streak of output hikes.
Eight of the bloc’s member nations will produce 548,000 additional barrels per day from August, with Saudi Arabia and Russia seeing the largest production hikes. This is the fourth consecutive month of oil output increases, and would exceed July’s hike of 411,000 barrels per day.
“In view of a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories, and in accordance with the decision agreed upon on 5 December 2024 to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments starting from 1 April 2025, the eight participating countries will implement a production adjustment of 548 thousand barrels per day in August 2025 from July 2025 required production level,” said OPEC+.
Production hikes in April were set at 137,000 barrels per day, before rising to 411,000 barrels per day in the following three months. S&P Global Commodity Insights analysts had previously expected another increase of 411,000 barrels per day in August.
In June, Saudi Arabia, Kuwait, and the United Arab Emirates also produced more oil than OPEC+ targets had required, amid concerns that the conflict between Israel and Iran could impact shipping through the Strait of Hormuz.
These eight nations are reversing previous voluntary production cuts, having agreed to reduce output by 2.2 million barrels per day until the end of 2025’s first quarter. Another decrease of 1.66 million barrels per day is set to remain in effect until the end of 2026.
S&P analysts have projected that recent output hikes will lead to a surplus of more than 1 million barrels per day by the end of 2025.
OPEC says these production increases could be paused or reversed depending on market conditions. The eight nations “also confirmed their intention to fully compensate for any overproduced volume since January 2024”.
Brent crude prices dropped by 0.79% to US$67.76, as of 8:55 am (AEST). West Texas Intermediate fell by 0.83% to $65.95.
