OPEC+ Set to Hike Oil Production Quotas Amid Global Supply Disruptions

OPEC+ is expected to raise oil production quotas for September as the Middle East war disrupts global energy supplies. Saudi Arabia, Russia, and five other members of OPEC+ are likely to increase their production by 1,88,000 barrels per day, according to Jorge Leon from Rystad Energy.

This would be the last in a series of production adjustments, following several months of similar hikes. Between late 2022 and 2023, OPEC+ agreed to cut oil production by nearly six million barrels per day due to concerns about falling oil prices.

However, many OPEC+ members are struggling to produce as much oil as their official targets allow due to a decline in production capacity. For instance, Russia's oil infrastructure has been repeatedly targeted by Ukrainian drone attacks, and its production is hovering at around 9 million barrels per day, compared to a target of 9.8 million barrels per day.

Next year, OPEC+ will face potentially difficult talks over new production quotas as some member countries, such as Iraq, have expressed a desire to significantly boost production. The UAE's withdrawal from the group in May has highlighted a weakness in cohesion, according to Leon.