OPEC+ Countries to Increase Oil Production Modestly in August

Seven countries within the OPEC+ oil-producing alliance plan to modestly increase their monthly oil production in August, a move that will bring more oil to the market as fuel prices fall to pre-war levels. The decision, announced Sunday, will add a combined 188,000 barrels per day to global output.

The participating countries are Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman. This marks the fifth consecutive month OPEC+ has agreed to raise oil outputs.

The group stated that its members will continue to monitor market conditions and emphasized the importance of a cautious approach to support market stability. The announcement comes as crude oil prices have tumbled in the past month, influenced by market optimism and an interim deal between the U.S. and Iran aimed at ending their conflict.

As part of the broader memorandum of understanding, Iran has agreed to ensure unimpeded passage for ships through the Strait of Hormuz, while the U.S. has agreed to end its blockade of Iranian ports. Commercial vessel traffic through the strait, which previously handled about a fifth of the world's oil, has increased since the agreement. However, traffic remains below pre-war levels, and tensions persist in the crucial waterway. Iran's joint military command recently warned that oil tankers must use approved routes or face consequences.

Oil prices have continued to decline while U.S. and Iranian negotiators work toward a final peace agreement. Brent crude, the international benchmark, was trading below $72 a barrel shortly after commodities trading opened Sunday night, approaching prices seen before the U.S. and Israel launched strikes against Iran in late February. Prices had surged to nearly $120 per barrel in March.

The earlier conflict triggered an energy crisis globally. With much of the shipping in the Strait of Hormuz blocked, previous production increases by OPEC+ were insufficient to offset the impact on global oil supplies. Many Middle Eastern oil producers were forced to cut production early in the conflict due to logistical challenges. S&P Global Energy estimates that Gulf oil production may not fully rebound until at least the first quarter of 2027.

Energy experts have consistently warned that elevated fuel prices and the cost of consumer goods are likely to persist long after the conflict concludes.