The Organization of the Petroleum Exporting Countries and its allies agreed to maintain their aggressive production increases through July, adding 411,000 barrels per day for the third consecutive month as the group prioritizes market share over price support.
The decision by eight key OPEC+ members comes despite oil prices falling about 20% this year, with US crude hitting four-year lows around $57-60 per barrel. Brent crude futures traded around $63-64 per barrel Monday.
The production increases reverse five years of output cuts for OPEC+, which had reduced production by nearly 5 million barrels per day to support prices.
Saudi Arabia and Russia, OPEC+’s de facto leaders, are driving the new approach to regain market dominance while pressuring members who exceed their production quotas. “The headline motive has centred on punishing OPEC+ members like Iraq and Kazakhstan that have persistently produced above their pledged quotas,” Commonwealth Bank of Australia analysts said in a Monday note.
The eight countries implementing increases are Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman. They plan to gradually phase out 2.2 million barrels per day of voluntary cuts through September 2026.
Read: Oil Slips to Weekly Lows on Prospect of Another Super-Sized OPEC+ Boost
Kazakhstan has openly defied the group, with its energy minister saying the country will prioritize national interests over OPEC+ decisions. The nation’s April oil output exceeded its quota despite a 3% decline.
The increases come as President Donald Trump has repeatedly asked OPEC+ to pump more oil to help ease US gasoline prices amid inflation pressures. Trump is scheduled to visit Saudi Arabia soon to discuss arms and nuclear agreements.
OPEC+ currently accounts for 47% of global crude oil production, down from 53% when the expanded group formed in 2016. Analysts expect global oil demand to grow by 740,000-775,000 barrels per day in 2025, though concerns about economic slowdowns have dampened market sentiment.
US shale producers face increasing pressure from OPEC+ supply increases. The number of operating US oil rigs fell for five consecutive weeks through late May, hitting 461 rigs, the lowest since November 2021.
Goldman Sachs analysts anticipate OPEC+ will implement one final 410,000 barrel-per-day increase in August, potentially bringing back nearly 2.2 million barrels per day by November. OPEC+ ministers plan to meet in early July to set August production levels.
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