OPEC+ Agrees to Boost Oil Production by 188,000 Barrels per Day in September

The Organization of the Petroleum Exporting Countries (OPEC+) has agreed to boost oil production by 188,000 barrels per day in September. This increase comes after a backdrop of disruption caused by the Mideast war and despite efforts to unwind voluntary cuts.

OPEC+ countries Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman decided on the increase during an online meeting. Analyst Jorge Leon notes that OPEC+ has finished unwinding its voluntary cuts, but warns that 'the next challenge is managing the surplus that could emerge as export flows normalise.'

The Gulf countries have struggled to increase exports due to Iran's near-paralysis of the Strait of Hormuz during the war. Despite a brief upswing in shipping traffic after a US-Iran memorandum of understanding was signed in June, exports remain constrained.

Rystad Energy's Leon predicts that OPEC+ will implement a production adjustment and then pause further supply changes, with 'little incentive to rush into further supply changes.'