MON JULY 07 2025-theGBJournal| OPEC+ announced a significant output increase of 548,000 barrels per day for August, marking a faster-than-expected unwinding of previous production cuts, and the cut is not over yet.
The output boosts comes as the Organization shifts strategy to reclaim market share amid rising global demand and recent geopolitical shocks involving Israeli and U.S. attacks on Iran.
This move, which follows smaller monthly increases in the past three months, comes also amid pressure from U.S. President Donald Trump to help bring down gasoline prices and is backed by a steady economic outlook and tight global oil inventories.
The increase will be implemented by eight members—Saudi Arabia, Russia, the UAE, Kuwait, Oman, Iraq, Kazakhstan, and Algeria—who began reversing a 2.2 million bpd voluntary cut in April.
With this latest step, OPEC+ will have restored 1.918 million bpd of that reduction, leaving just 280,000 bpd yet to be released, while also granting the UAE an additional 300,000 bpd quota.
However, tensions remain within the alliance as countries like Kazakhstan and Iraq have exceeded their quotas, frustrating more compliant members.
Despite the production ramp-up, OPEC+ continues to hold back 3.66 million bpd under other layers of cuts, and all eyes now turn to the next ministerial meeting set for August 3, where further adjustments may be considered.
Global oil markets having been having their say on the development.
Benchmark Brent crude fell below $67/barrel shortly after the OPEC+ announcement on Saturday but quickly rebounded as oil shrugged off the impact of the supply hike.
The Brent is up 1.1% to $69 by early Monday trading and the West Texas Intermediate crude is up at $67.52 from an earlier low of $65.40.
Goldman are projecting a 550, 000 bpd in increase for September at the OPEC+ August 3 meeting, as they seek bolster market share.
And with global inventories rising above one million barrels/day, a major surplus looms.
Recall that Brent is already down by about 9% this year. Analysts sees market oversaturation with the OPEC+ shift from price defense to market share and they equally project that could send prices to $60/barrel by Q4.
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