LONDON: OPEC has agreed to increase its oil production targets from August, adding more supply to the global market as prices ease following improved shipping conditions in key trade routes, the group said on Sunday.
The oil producing alliance will raise output quotas by 188,000 barrels per day starting in August. The decision follows similar increases already scheduled for June and July.
The seven core members of OPEC+, which includes OPEC nations and allies such as Russia, have gradually increased production targets since April, with total planned hikes reaching nearly 800,000 barrels per day over the period.
However, actual output has remained limited in recent months due to earlier disruptions in the Strait of Hormuz, which affected exports from major producers including Saudi Arabia, Kuwait, and Iraq.
According to OPEC data, production among key members fell sharply earlier in the year but began recovering in June as export routes gradually reopened and shipping conditions improved.
Oil prices have eased back to levels seen before recent regional tensions, pressured by weaker demand from China, higher supply from non-Middle Eastern producers, and increased global stock releases coordinated by the International Energy Agency.
Analysts say market attention remains focused on how quickly shipping through the Strait of Hormuz normalizes and whether demand from major importers recovers? Brent crude traded near $72 per barrel on Friday, down from recent highs above $120 per barrel.
OPEC+ continues to face internal challenges, including differing quota demands among members. Iraq has pushed for higher production limits, while the United Arab Emirates has previously stepped away from the group over quota disagreements.
The alliance is gradually rolling back a 1.65 million barrel/day supply cut agreed in 2023, with further decisions expected at its next meeting in August.
