OPEC+ Agrees to Boost Oil Production Amidst West Asian War Disruptions
OPEC+, a group of major oil-producing countries led by Saudi Arabia and Russia, has agreed to increase petroleum production by 188,000 barrels per day from September. The decision was made in an online meeting on Sunday amidst disruptions caused by the West Asian war.
The increase is expected to bring some relief to the market, which has been struggling with supply chain issues. However, analysts warn that the real impact will not be felt until export flows normalize.
Rystad Energy analyst Jorge Leon noted that OPEC+ has already ended its voluntary cuts, but the challenge now is to manage the additional supply that may come when export flows resume.
Leon also warned that the current geopolitics is masking the volume of supply increase, and it will become much clearer when export flows normalize. The group's decision to end the second production cut package brings an estimated halt in the fourth quarter, with a focus on preparing for 2027 quota negotiations.