Eight core Opec+ members have agreed to fully unwind the remaining portion of their 2.2mn b/d voluntary crude production cuts in September.
Saudi Arabia, Iraq, Kuwait, Russia, the UAE, Algeria, Oman and Kazakhstan will raise their collective crude production target by 547,000 b/d in September, matching the increase for August.
The decision means the group will have restored all of a scheduled 2.46mn b/d increase — including a 300,000 b/d capacity-related adjustment for the UAE — in just six months instead of an initially planned 18 months ending in September 2026.
While this in theory marks the completion of the unwinding process for the 2.2mn b/d layer of voluntary cuts, the group said it could continue to increase or even reduce output.
"The phase-out of the additional voluntary production adjustments may be paused or reversed subject to evolving market conditions," the group said.
The same eight members, plus Gabon, could start unwinding a second layer of voluntary production cuts worth 1.66mn b/d that are scheduled to remain in place until the end of 2026. Preliminary discussions on this second layer have taken place, delegates told Argus. There are internal concerns that some members may not be able reach the higher output levels should the cuts be unwound, which would raise questions over the Opec+ alliance's spare production capacity.
The latest output hike comes as supply and demand uncertainties are heightened because of US threats to impose secondary sanctions on Russian oil sales and by volatile US trade policy. But the eight countries once again cited "steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories" as the basis for their decision.
Ice Brent crude futures closed at just under $70/bl on 1 August, largely unchanged since the eight last met in early July.
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 again said the faster pace would help facilitate this compensation.
The eight members are scheduled to meet again on 7 September.
