OPEC+ To Further Accelerate Supply Boost With Larger August Hike

OPEC+ will increase production even more rapidly than expected next month, as the group led by Saudi Arabia seeks to capitalize on strong summer demand in its move to reclaim market share.

Eight key alliance members agreed to raise supply by 548,000 barrels a day at a virtual meeting on Saturday, according to delegates. The group previously announced increases of 411,000 barrels for each of May, June and July — already three times the level originally planned — and traders had expected the same level for August.

The latest increase builds on a dramatic strategy pivot by the Organization of the Petroleum Exporting Countries and its partners to accelerate the revival of curtailed production. Since April, the group has shifted from years of output restraint to reopening the taps, surprising crude traders and raising questions about its long-term strategy.

OPEC+ is returning curtailed capacity into a market that is widely expected to be oversupplied later in the year. Brent oil futures have retreated 8.5% in 2025, pressured by the added production from OPEC+ members and elsewhere, alongside an uncertain demand outlook as President Trump’s trade war threatens to rattle the global economy.

However, the market looks more robust in the immediate term, and some delegates said the group is speeding up its production revival in part to take advantage of stronger demand during the northern hemisphere summer. Refiners in the US have been churning through the most crude for the time of year since 2019, and prices for some fuels, particularly diesel, have soared.

In the months following the strategy pivot, delegates have offered a range of explanations for the shift: from satisfying peak summer fuel needs, to punishing the group’s over-producing members and regaining sales volumes ceded to rivals like US shale drillers. Officials have said that Riyadh is especially eager to restart more idled capacity as quickly as possible.

The larger August increase would put OPEC+ on pace to complete the return of 2.2 million barrels a day of previously halted output in September — a year earlier than scheduled in their original roadmap.

“With OPEC+ having pivoted to a market share over a price defence strategy, it was pointless to keep a notional voluntary cut in place,” said Harry Tchilinguirian, group head of research at Onyx Capital Group. “It was best to get it over and done with it, and simply move on.”

Still, the actual increase will likely be lower — the group has produced below the figures announced in previous months as Saudi Energy Minister Prince Abdulaziz bin Salman presses some members to compensate for earlier over-supply and forgo their share of the increases. Kazakhstan — the most egregious offender — continues to pump hundreds of thousands of barrels above its quota.

Crude traders had widely expected OPEC+ to ratify another hike of 411,000 barrels day for August, according to a Bloomberg survey, and delegates’ initial discussions this week also focused on that level.

The extra barrels may be welcomed by President Trump, who has repeatedly called for lower oil prices to bolster the US economy, and needs to stave off inflation while pushing the Federal Reserve to lower interest rates.

Yet the added output also threatens to swell a looming supply surplus. Global oil inventories have been accumulating at a pace of about 1 million barrels a day in recent months, as consumption in China cools while production climbs across the Americas, from the US to Guyana, Canada and Brazil.

Markets are headed for a substantial surplus later this year, according to the International Energy Agency in Paris. Wall Street firms such as JPMorgan Chase & Co. and Goldman Sachs Group Inc. anticipate that prices will sink towards $60 a barrel or lower in the fourth quarter.

Prices jumped during the conflict last month between Iran and Israel, but fell back quickly as it became clear that oil flows remained unaffected.

By pushing for faster supply increases, Saudi Arabia must balance the benefits of higher sales volumes with the impact of falling oil prices. The kingdom is already grappling with a soaring budget deficit, and has been forced to slash spending on some of Crown Prince Mohammed bin Salman’s flagship projects.

OPEC+ co-leader Russia is confronting a deteriorating economic outlook and potential banking crisis as President Vladimir Putin continues to wage a costly war against neighboring Ukraine.

The drop in prices is also spreading pain through the American shale industry. In a recent survey, US shale executives said they expect to drill significantly fewer wells this year than planned at the start of 2025, citing lower oil prices and uncertainty around Trump’s tariffs.