OPEC+ members have agreed in principle on another bumper oil production increase for September, according to a delegate, as the group moves to reclaim its share of global crude markets.
Saudi Arabia and its partners plan to ratify the addition of 548,000 barrels a day for next month when they hold a video conference on Sunday, the delegate said. The increase would complete the reversal of a 2.2 million-barrel cutback made by eight members of the group in 2023, and also accounts for an extra allowance being phased in for the United Arab Emirates.
The latest hike caps a dramatic shift from the Organization of the Petroleum Exporting Countries and its partners from defending prices to opening the taps, which has helped put a lid on oil and gasoline futures in the face of geopolitical tensions and strong seasonal demand, offering some relief for drivers and a win for President Donald Trump. The accelerated increases have helped fuel expectations for a global supply surplus later in the year.
The market’s focus may now shift to the next layer of halted output, which amounts to 1.66 million barrels, and is formally scheduled to remain offline until the end of 2026.
OPEC+ sent oil prices crashing to a four-year low in early April when it announced a sudden acceleration in its plan to unwind the current tranche of cuts, with markets still reeling in the wake of Trump’s dramatic “Liberation Day” tariff announcements. The alliance has followed with a series of bumper monthly increases, and sped up even further in July.
Crude prices have clawed back losses as demand strengthened over the summer, with Brent futures in London trading just below $70 a barrel on Friday — down 6.7% this year. However, analysts have warned the market faces a mounting surplus later this year, as supplies increase and slowing global growth weighs on demand. Benchmark retail gasoline prices in the US even edged lower last month.
The decision comes against the backdrop of threats by Trump to target Russian oil exports by putting secondary tariffs on buyers of its supplies unless there is a swift ceasefire in the war in Ukraine.
A disruption to Russian flows would threaten to drive up crude prices, and run counter to Trump’s repeated call for cheaper oil, as he pushes the Federal Reserve to lower interest rates.
Russia’s Deputy Prime Minister Alexander Novak made a rare visit to Riyadh on Thursday to discuss “cooperation between the countries” with Saudi Arabian Energy Minister Prince Abdulaziz bin Salman. The two countries have jointly led OPEC+ since its creation almost a decade ago.
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