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Eight core Opec+ members have agreed to a third consecutive month of accelerated output hikes, the Opec secretariat said today.
Saudi Arabia, Iraq, Kuwait, Russia, the UAE, Algeria, Oman and Kazakhstan will raise their collective crude production target by another 411,000 b/d in July, matching the increases agreed for May and June.
This pace is three times faster than the group's original plan to unwind 2.2mn b/d of voluntary cuts at a rate of 137,000 b/d each month between April 2025 and September 2026.
The eight's combined production target will rise to 31.79mn b/d in July, from 31.38mn b/d in June and 30.96mn b/d in May. These figures exclude additional pledges to cut output by members that have exceeded their targets. The group of eight produced 30.71mn b/d in April, according to Argus estimates.
The decision means they will have restored around 55pc of a scheduled 2.46mn b/d increase — which includes a 300,000 b/d capacity-related adjustment for the UAE — in just four months.
The announcement comes against a backdrop of global economic uncertainty, driven by US president Donald Trump's trade tariff policies, which have contributed to a $10/bl drop in Ice Brent crude futures since early April. But the eight countries cited a "steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories" as the basis for their decision.
Delegates told Argus the accelerated pace also reflects frustration with overproducing members such as Kazakhstan and Iraq — the former still producing above target, and the latter falling short of pledges to compensate. At least two members pushed to pause the unwinding process, a source said, citing budgetary pressure from subdued oil prices.
Another factor supporting the faster increase may be lower expectations for non-Opec+ supply growth this year and next, particularly in the US, where falling prices have curbed drilling activity.
The actual increase in Opec+ production may fall short of the headline figure, given that some members are already producing above their targets and almost all of the eight have pledged to compensate for past overproduction. The group noted that the faster pace would help facilitate this compensation.
The group is scheduled to meet again on 6 July to decide on August production levels.
