OPEC+ Lifts Quotas For Fourth Month Running Despite Gulf Production Collapse

Seven core members of OPEC+ gathered on Sunday and signed off on another round of oil production quota increases, pushing targets up by 188,000 barrels per day from July. It was the fourth such decision in four months.

The US-Iran war has effectively shut the Strait of Hormuz since late February, cutting off the export routes that Gulf members rely on to move oil to market. Saudi Arabia and other key producers have been unable to supply customers in full for over three months. Four months of quota increases adding nearly 600,000 barrels per day have done nothing to change that reality.

The Numbers Tell The Story

• Actual OPEC+ production in April: 33.19 million barrels per day

• Production in February before the war: 42.77 million barrels per day

• Cumulative quota increases April to June: Nearly 600,000 barrels per day

• July quota increase agreed Sunday: 188,000 barrels per day

• Iraq's individual quota increase from July: 26,000 barrels per day

• Remaining 2023 cut to be unwound from July: Approximately 567,000 barrels per day

• Brent crude on Monday: $96.63

• West Texas Intermediate on Monday: $93.98

• Pre-war oil price: Around $72 per barrel

What Was Decided

The seven members driving Sunday's decision were Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia and Oman. The 188,000 barrels per day increase matches the June hike, which was adjusted down from 206,000 barrels per day following the UAE's departure from the Organisation of the Petroleum Exporting Countries after nearly six decades of membership.

In a broader meeting of all 21 OPEC+ members on the same day, ministers left the group-wide output policy unchanged through the end of 2026. The group also confirmed it is pushing ahead with a capacity review of member states that will set the production baselines used to calculate 2027 quotas.

Also Read - Truhome Finance Gets SEBI Nod For ₹3,000 Crore IPO; Listing On NSE And BSE Planned

Unwinding The 2023 Cut

The quota increases are part of a structured plan to reverse a 1.65 million barrels per day production cut agreed in 2023. With the UAE now outside the equation, approximately 567,000 barrels per day of that original cut remains to be returned to the market from July. If the group holds the current monthly pace through August and September, the full unwinding would be complete before year-end.

Source:

Reuters