OPEC+ Will Significantly Increase Oil Production
- 5.07.2025, 8:34
Reasons given.
OPEC+ countries may increase oil production by 500 thousand barrels daily as early as in August. This could bring down prices on the market.
According to Bloomberg.
The OPEC+ member countries are considering further accelerating the recovery of oil production. Delegates said this ahead of the alliance's virtual meeting due to take place on Saturday.
Saudi Arabia has initiated an increase in OPEC+ production by 411,000 bpd over the past three months. The group's members are now discussing the possibility of an even larger production increase in August.
This active strategy allows the group to regain market share from non-OPEC+ competitors and is being implemented despite the risk of a global market glut, which could put additional pressure on prices.
The recent drop in oil prices benefits U.S. President Donald Trump, who sees cheaper energy as a tool to reduce costs for inflation-hit consumers.
According to one delegate, eight key member countries of the grouping are considering increasing production by more than 500,000 bpd. Another delegate said that would complete the return to the market of 2.2 million bpd of previously halted production by September, earlier than planned.
Brent crude futures were trading around $68 a barrel in London on Friday, down 13% from two weeks ago. Israel and Iran's shift from armed conflict to a fragile truce, had little impact on energy exports from the Middle East region.
"As OPEC+ has shifted from a strategy of price protection to maintaining market share, holding on to nominal voluntary production cuts is losing meaning. It may make more sense to complete the process faster and move on," said Harry Chilingirian, head of Onyx Capital Group's analytical division.
Since April this year, OPEC and its partners have abandoned their long-standing policy of limiting production and started to actively increase supplies, which came as a surprise to oil traders and raised questions about the association's future strategy.
Delegates cited the need to meet peak summer fuel demand, adjust excess production by individual member countries, and regain market share from competitors, particularly US shale oil producers, among the reasons for the policy revision. Riyadh officials, they said, are particularly keen to restore previously halted production as quickly as possible.
The additional oil volumes are expected to be welcomed by President Trump, who has consistently advocated lower oil prices to support the U.S. economy and curb inflation, while pressuring the Federal Reserve to lower its discount rate.
At the same time, ramping up production carries the risk of increasing oversupply in the market, which could potentially prorate the price of crude oil from the U.S. to the U.S. market. Analysts at JPMorgan Chase & Co. and Goldman Sachs Group Inc. don't rule out that oil could fall to $60 a barrel or even lower as early as the fourth quarter.