OPEC+ Boosts Oil Production Amid Ongoing Middle East Disruption
OPEC+, comprising key members Saudi Arabia, Russia, and five others, has agreed to boost oil production by 188,000 barrels per day from September. This decision comes amidst ongoing disruption in the Middle East caused by war.
The seven participating countries, including Iraq, Kuwait, Kazakhstan, Algeria, and Oman, decided on this increase following an online meeting over the weekend. The move was widely expected by analysts, who point out that OPEC+ has completed unwinding its voluntary cuts.
Rystad Energy analyst Jorge Leon notes that 'OPEC+ has finished unwinding its voluntary cuts. The next challenge is managing the surplus that could emerge as export flows normalise.' However, Leon also warns that 'today's decision changes little in the near term because (the Strait of) Hormuz remains constrained.'
The Gulf countries have struggled to increase exports due to the Strait of Hormuz being partially closed by Iran during the war. Many OPEC+ members are also unable to produce as much oil as their official targets allow, resulting from a decline in production capacity.