OPEC+ agrees to raise oil output by 188,000 barrels per day

Seven OPEC+ members that are implementing additional voluntary production cuts beyond the group’s official quotas — Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman — have agreed to increase their oil production quotas by a combined 188,000 barrels per day, according to a press release issued by OPEC+ following its latest meeting.

As a result, the group’s total oil production quota will rise to 36.019 million barrels per day next month. The two leading participants in the agreement, Saudi Arabia and Russia, will each be allowed to increase output by 62,000 barrels per day, bringing their respective quotas to 10.416 million and 9.887 million barrels per day.

Iraq will be permitted to raise production by 26,000 barrels per day to 4.405 million barrels per day, Kuwait by 16,000 barrels per day to 2.660 million, Kazakhstan by 10,000 barrels per day to 1.618 million, Algeria by 6,000 barrels per day to 1.001 million, and Oman by 5,000 barrels per day to 836,000 barrels per day.

The seven countries are currently restoring to the market 1.65 million barrels per day of previously curtailed production volumes, including the share formerly attributed to the United Arab Emirates before its departure from the alliance in May. These adjustments are the only changes affecting the group’s overall production level. Under the current schedule, the countries would need to increase quotas by another 188,000 barrels per day in September to fully unwind those voluntary cuts.

Since March, OPEC members participating in the agreement have been unable to increase production in line with their quotas because Iran, following attacks by the United States and Israel, closed the Strait of Hormuz, the key route through which these countries export oil to global markets. The production shortfall is estimated at around 8 million barrels per day.

However, after the United States and Iran signed a memorandum on a peaceful settlement in mid-June, Gulf producers significantly increased output, although official figures have yet to be released.

The next OPEC+ meeting is scheduled for August 2.

By Jeyhun Aghazada