OPEC+ is set to consider increasing oil production at its meeting this Saturday, responding to recent oil price swings following military tensions involving Israel and the United States targeting Iran.
The oil-producing group, which collectively pumps around half of the world’s supply, has been restricting output since 2022 to maintain price stability.
However, 2024 has seen a pivot in strategy.
In an effort to reclaim market share and under pressure from the U.S. to lower gasoline prices, OPEC+ has gradually ramped up output.
According to sources familiar with the matter, the group may approve an output hike of up to 550,000 barrels per day (bpd) for August.
This would mark a notable increase from the 411,000 bpd monthly rise seen in May, June, and July, and a sharp jump from April’s increase of just 138,000 bpd.
Eight Core Members to Decide August Output
Eight key members of the alliance – Saudi Arabia, Russia, UAE, Kuwait, Oman, Iraq, Kazakhstan, and Algeria – are scheduled to meet virtually at 0900 GMT on Saturday.
Their goal is to finalize production policy for the month ahead.
These countries began phasing out a recent 2.2 million bpd production cut in April and have steadily accelerated increases despite downward pressure on crude prices from the added supply.
Some members, notably Kazakhstan and Iraq, have pumped above agreed quotas, drawing criticism from peers who maintained compliance with cuts.
Kazakhstan’s output in particular surged to match a record high.
Strategic Shift to Counter Rising Competition
OPEC+, a coalition of the Organization of the Petroleum Exporting Countries and allies like Russia, is adjusting its output levels to compete with growing production from non-member nations such as the United States.
So far, the group has reversed 1.37 million bpd of the 2.2 million bpd cut between April and July, accounting for over 60% of the reduction.
Beyond that, OPEC+ continues to enforce additional layers of production cuts totaling 3.66 million bpd, indicating a balancing act between market support and competitive positioning.