OPEC+ Pauses Output Hikes Amid Strait of Hormuz Disruptions

OPEC+, the group of oil-producing countries, is expected to pause its phased output increases after September. This decision comes as the group has been steadily raising production quotas due to supply shortages caused by the war with Iran. The Strait of Hormuz disruption has forced the oil market to burn through inventories and emergency stockpiles, which could keep crude prices elevated.

The pause in output hikes is likely to impact supplies later this year, particularly if Iraq leaves OPEC or receives a meaningful increase in its production quota. This could enable major oil companies like Chevron and ConocoPhillips to accelerate production growth in the country.

Goldman Sachs has warned that oil prices could top $120 a barrel in the near term and average $100 next year due to current disruptions. OPEC's decision to maintain its production after September through the end of the year could have meaningful implications for several major oil companies, particularly those with agreements to enter the Iraqi oil market.