OPEC+ Confirms Major July Oil Output Hike Amid Market Tensions

OPEC+ Confirms Major July Oil Output Hike Amid Market Tensions

In a bold move, the OPEC+ alliance has confirmed it will raise oil production by 411,000 barrels per day in July, continuing its aggressive strategy to regain market share and discipline members exceeding quotas, such as Iraq and Kazakhstan.

Following years of deep production cuts—over 5 million barrels per day or roughly 5% of global demand—OPEC+ began unwinding in April with a modest increase, then tripled that figure for May, June, and now July.

The decision comes despite growing concerns that increased supply could weigh on oil prices. On Friday, U.S. crude futures dropped, partly in anticipation of a bigger-than-expected hike. Brent crude slipped by 22 cents (0.34%) to $63.93 a barrel, while West Texas Intermediate (WTI) dropped 21 cents to $60.73.

According to OPEC+ officials, market share has become a top priority, especially for leading producers Saudi Arabia and Russia, who are also looking to pressure non-compliant members.

“If price won't get you the revenues you want, volume might,” said Harry Tchilinguirian, senior analyst at Onyx Capital Group, noting the group’s aggressive posture.

Eight OPEC+ nations met virtually on Saturday to finalize the July quota and considered—but ultimately held off on—an even larger hike. A small group of countries, including Algeria, reportedly requested a pause in increases.

OPEC+ cited a "steady global economic outlook and healthy market fundamentals" — including low oil inventories — as justification for the added supply.

The group, which produces roughly half the world’s oil, has so far reinstated 1.37 million barrels per day, or 62% of the 2.2 million bpd they agreed to bring back to the market beginning in April.

Analysts point out that summer demand is expected to rise, which supports the decision to increase output now. “The oil market remains tight and can absorb additional barrels, especially with seasonal demand rising,” said UBS analyst Giovanni Staunovo.

Despite recent output hikes, two other tiers of production cuts from OPEC+ are still in place and are expected to continue through the end of 2026.

Oil prices briefly touched a four-year low in April, dipping below $60 a barrel after OPEC+ announced the tripling of its May hike and as concerns over global economic slowdown were fueled by U.S. trade policies.

According to a Reuters poll, global oil demand is forecast to grow by 775,000 bpd in 2025, while the International Energy Agency projects a rise of 740,000 bpd.

OPEC+ seems to be banking on demand catching up — or being forced to adapt — as the group reasserts itself as a dominant force in the global oil market.

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Source: CNBC