OPEC+ has confirmed a further production increase of 411,000 barrels per day for July, marking the third consecutive monthly hike as the group moves to regain control of the oil market and discipline over-producing members.
The coalition of oil-exporting nations, including Russia and key OPEC countries, had previously curbed output by more than 5 million barrels per day to support prices.
However, since April, eight OPEC+ nations have progressively increased their output, nearly tripling their earlier April rise.
Saturday’s decision followed an online meeting among the eight countries involved, during which other production strategies were also considered.
The move is part of a broader plan to reverse a total of 2.2 million barrels per day in earlier cuts.
Market Share, Not Prices, Now Driving Strategy
According to OPEC+, the July increase is justified by a steady global economic outlook and healthy oil market conditions, which they say are reflected in low inventory levels.
However, analysts believe the underlying motive is to prioritize market share.
“Today’s decision only goes to show that market share is on top of the agenda,” said Harry Tchilinguirian of Onyx Capital Group.
“If price will not get you the revenues you want, they are hoping that volume will.”
Saudi Arabia and Russia, the group’s leading members, are reportedly aiming to regain lost ground and punish member countries such as Iraq and Kazakhstan for previous overproduction.
Higher Summer Demand Supports Output Hike
With global oil consumption typically increasing during the summer, OPEC+ believes the market can accommodate the additional supply.
“The oil market remains tight indicating it can absorb additional barrels,” said Giovanni Staunovo of UBS.
He noted that the effective increase might be limited, given that some of the eight nations are already producing above their assigned quotas.
Russian Deputy Prime Minister Alexander Novak echoed these sentiments, stressing that seasonal demand justifies higher output.
Still, not all members are on board.
Algeria, for example, reportedly requested a pause in further hikes during the Saturday meeting.
Impact on Prices and Global Supply
The decision to keep increasing supply has had a noticeable impact on prices.
Brent crude dipped below $60 in April, its lowest in four years, partly due to concerns over increased production and global economic uncertainty spurred by U.S. trade policies.
As of Friday, oil prices hovered just under $63.
Since the start of these incremental hikes in April, OPEC+ has added a combined 1.37 million barrels per day—about 62% of its total rollback plan.
Forecasts indicate that global oil demand will continue to rise, with a Reuters poll projecting an average increase of 775,000 barrels per day in 2025.
The International Energy Agency offers a slightly lower forecast of 740,000 barrels per day for the same period.