OPEC+ announced Saturday it will increase oil production by 411,000 barrels per day in July, marking the third consecutive monthly hike as the alliance led by Saudi Arabia and Russia seeks to claw back market share and penalize member nations that have exceeded agreed-upon output limits. The move, while framed as a response to "healthy market fundamentals," comes despite falling crude prices and growing skepticism among analysts.
The latest decision, made during an online meeting of the eight-member subgroup known as the "Voluntary Eight," raises the cumulative increase since April to 1.37 million barrels per day-roughly 62% of the 2.2 million barrels the group previously cut in 2022. "Today's decision only goes to show that market share is on top of the agenda. If price will not get you the revenues you want, they are hoping that volume will," said Harry Tchilinguirian of Onyx Capital Group.
Brent crude closed at $62.61 per barrel on Friday, while West Texas Intermediate settled at $60.79, both near four-year lows. Prices fell sharply after OPEC+ began ramping up production in April and U.S. President Donald Trump announced fresh tariffs, raising concerns over global economic headwinds. "Three strikes from OPEC+, and none were softballs. May warned, June confirmed, and July fires a shot across the bow," said Jorge Leon, geopolitical analyst at Rystad Energy and former OPEC official.
The official rationale for the increase cites rising summer demand, low inventories, and what the group described as a "steady global economic outlook." However, analysts argue the move reflects strategic frustrations. Saudi Arabia is reportedly angered by Kazakhstan's persistent overproduction. Kazakh Energy Minister Yerlan Akkenzhenov recently informed OPEC that his country would not cut back, with analysts estimating it has been exceeding its quota by about 300,000 barrels per day.
"Saudi Arabia is angry with Kazakhstan," said Bjarne Schieldrop, chief commodities analyst at SEB. Algeria was also reported to have requested a pause in the output increases during Saturday's talks, according to a source familiar with the matter.
Some see geopolitical motivations behind the decision. "The scale of the production increase reflects more than just internal supply dynamics," said Leon. "This is a strategic adjustment with geopolitical aims: Saudi Arabia seems to be bowing to Donald Trump's requests." Shortly after returning to office, Trump urged Riyadh to boost oil supply to drive down U.S. gasoline prices.
OPEC+ currently accounts for about half of global oil output, and its latest action continues to squeeze U.S. shale producers, who are less able to remain profitable at current prices. "The oil market remains tight indicating it can absorb additional barrels, as the effective increase should be smaller as several of the eight countries are overproducing, and demand is seasonally rising," noted UBS analyst Giovanni Staunovo.
A Reuters poll published Friday projected global oil demand would grow by 775,000 barrels per day in 2025, while the International Energy Agency forecasted a slightly lower figure of 740,000 barrels per day. OPEC+ has other cuts still in place beyond the 2.2 million-barrel voluntary group reductions, with those broader restrictions expected to remain through the end of 2026.
