Sri Vijaya Puram, Aug. 3: The OPEC+ alliance has approved another increase in crude oil production from September, signalling the continued rollback of supply cuts introduced in 2023. However, the decision is unlikely to immediately ease global energy supply concerns as ongoing conflict in the Middle East continues to disrupt oil and gas exports through one of the world’s most critical shipping routes.
The decision, announced on Sunday, increases the group’s crude production quota by around 188,000 barrels per day. The move was approved by seven key OPEC+ producers, Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman, as part of the bloc’s phased restoration of production following earlier output reductions.
Despite the higher production target, global supplies may remain constrained. The continuing conflict in the Middle East has disrupted exports through the Strait of Hormuz, a strategic maritime corridor through which nearly 20 per cent of the world’s oil and gas exports pass. As a result, higher production quotas may not immediately translate into increased supplies reaching international markets.
The effectiveness of the production increase is also influenced by the output capacity of member countries. Russia, one of the alliance’s largest producers, continues to face pressure on its energy sector following repeated Ukrainian drone attacks targeting oil infrastructure. The country’s current production stands at around 9 million barrels per day, below its OPEC+ production target of approximately 9.8 million barrels per day.
The departure of the United Arab Emirates from the OPEC+ grouping in May has also added uncertainty to the alliance’s long-term production strategy. The exit followed years of disagreement over production restrictions and has raised questions about the future willingness of members to continue coordinated output limits.
Market analysts expect a cautious approach after the September increase. According to Rystad Energy, OPEC+ is expected to maintain production levels during the fourth quarter before beginning discussions on production quotas for 2027. The pause would allow producers to evaluate the impact of restored output, global demand and oil price movements before considering additional increases.
OPEC+ has steadily increased production targets since 2025 after several years of supply restraint. Between late 2022 and 2023, the alliance implemented three rounds of production cuts that reduced combined output by nearly 6 million barrels per day before gradually reversing those reductions.
Meanwhile, US President Donald Trump said he had cancelled planned US strikes against Iran if a deal with Tehran is reached quickly. Posting on Truth Social, Trump said Iran and other Middle Eastern countries had requested that military action be delayed as the framework of an agreement had been settled. Iran’s Mehr news agency rejected the claim, describing it as “nothing but a new lie” and denying that Tehran had made any such request.
