OPEC+ set to approve major oil production hike for September

OPEC+ members have agreed in principle to a significant increase in oil production for September, as the coalition moves to regain market share and ease prices amid global geopolitical tensions and seasonal demand pressures.

According to a delegate familiar with the matter, Saudi Arabia and its partners plan to ratify an additional 548,000 barrels per day when the group holds a video conference on August 3. The move would mark the final phase in reversing a 2.2 million-barrel-per-day cut implemented by eight members of the alliance in 2023. It also includes an extra allowance for the United Arab Emirates that is being gradually phased in, Caliber.Az reports, citing Bloomberg. 

The proposed increase marks a sharp departure from the Organization of the Petroleum Exporting Countries and its allies’ previous focus on propping up prices. The recent shift toward boosting output has helped keep a lid on oil and gasoline futures, despite persistent geopolitical risks and peak summer consumption.

This strategy has offered "some relief for drivers and a win for President Donald Trump," as the group accelerates supply hikes that could push the global oil market into surplus later this year. Analysts have increasingly warned of oversupply risks as demand growth slows in key economies.

The market’s attention is now likely to turn to the next tranche of halted output — amounting to 1.66 million barrels per day — which is officially scheduled to remain offline until the end of 2026.

OPEC+ sent shockwaves through the oil markets in early April by announcing a sudden acceleration in its plan to unwind the existing production cuts. The surprise move triggered a steep drop in oil prices, which fell to a four-year low, compounding market volatility already heightened by Trump’s "Liberation Day" tariff announcements.

Since then, the alliance has rolled out a series of aggressive monthly production increases, with an even faster pace adopted in July.

Brent crude futures in London closed just below $70 a barrel on August 1 — still down 6.7% for the year. Although prices have recovered over the summer due to strengthening demand, analysts warn that increased output, combined with cooling global growth, could push the market back into surplus. In the United States, benchmark retail gasoline prices dipped slightly last month.

The production decision also comes amid escalating tensions between Washington and Moscow. President Trump has threatened to impose secondary sanctions on countries that continue to purchase Russian oil unless there is a “swift ceasefire” in the ongoing war in Ukraine.

Such a disruption to Russian crude flows could send prices soaring — a result that would contradict Trump’s repeated calls for cheaper oil and pressure on the Federal Reserve to lower interest rates.

In a sign of intensifying diplomatic engagement, Russia’s Deputy Prime Minister Alexander Novak made a rare visit to Riyadh on July 31, where he met with Saudi Energy Minister Prince Abdulaziz bin Salman. The two nations have co-led the OPEC+ alliance since its inception nearly a decade ago. The meeting, according to official reports, focused on “cooperation between the countries.”

By Sabina Mammadli