OPEC+ Agrees to Boost Oil Output, But Market Impact May Be Delayed

OPEC+ has agreed to boost oil output by around 188,000 barrels per day starting from September, but its impact on the market may be delayed due to ongoing supply disruptions in the Middle East.

The decision was made after a meeting where core OPEC+ members Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan, and Oman agreed on the increase. This move ends the phased rollback of a 1.65 million bpd supply cut initially agreed upon in 2023.

However, the real market impact of this output hike is unlikely to be felt until the Strait of Hormuz deadlock ends, according to reports. A fifth of the world's energy and cargoes were shipped through the route before the US-Israel war on Iran began on February 28, causing major oil producers in the Gulf to struggle with exports.

Oil prices fell more than $1 on Friday as improving crude shipments through the Strait of Hormuz and an expected OPEC+ production increase outweighed fears of further supply disruptions from the ongoing Middle East conflict. Brent crude slipped $1.03, or 1.2%, to $88.00 a barrel, while US West Texas Intermediate (WTI) crude fell $1.50, or 1.8%, to $82.09.