OPEC+ Output Hike Lost in Noise of Ongoing Conflict
The OPEC+ decision to increase oil production quotas for September may seem significant, but its impact is largely irrelevant in the current market due to ongoing disruptions caused by the Iran conflict.
The core members of OPEC+, including Saudi Arabia and Russia, agreed to raise production by 188,000 barrels per day (bpd) for September. However, with the Strait of Hormuz remaining closed and the threat to the nearby Bab el-Mandeb waterway unresolved, there is little chance of shipping additional oil.
A Reuters survey showed that the eight members of OPEC with quotas pumped 20.276 million bpd in June, which was 6.246 million bpd below their agreed target. Russia's production was nearly 1 million bpd below its quota in June, according to OPEC data.