OPEC+ to Boost Oil Output by 188,000 Barrels per Day in August

OPEC+ agreed on Sunday to raise oil production by 188,000 barrels per day in August, the fifth consecutive monthly increase. The decision, taken by seven key members (Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, Oman), sent prices lower: Brent crude fell 0.36% to $71.87 and WTI dropped 0.68% to $68.22 Source: portafolioco; Source: eldiado.

Background and Context

The increase is part of a gradual unwinding of voluntary cuts of 1.6 million bpd implemented in 2023. However, prior increases were largely theoretical because the Iran war blocked the Strait of Hormuz, causing involuntary production cuts of up to 10 million bpd in April Source: infobae. A US-Iran memorandum of understanding on June 17 has allowed shipping to resume, though not fully Source: euronewses.

Market Impact

Crude prices have fallen 43% from their war peaks, with Brent near $72—back to pre-war levels Source: elmundoes. Analysts warn of a potential global surplus in 2027 as production recovers and demand slows, especially from China Source: portafolioco. The International Energy Agency projects oil supply could exceed demand by 3.8 million bpd this year Source: lavanguardia.

Internal Discontent

The OPEC+ alliance faces tensions: Iraq has requested a higher quota to compensate for war losses, and the UAE left the group in May Source: cnn; Source: excelsiormx. Experts caution that if prices continue to fall, members may face a choice between restricting output or entering a price war Source: abces.