<article><p class="lead">Kuwait has increased crude production in line with its 2.811mn b/d Opec+ quota for August, according to oil minister Mohammad al-Fares.</p><p>It means Kuwait has fully unwound the output cuts that it implemented from May 2020 as part of the Opec group's response to the Covid-19 pandemic. August quotas for all Opec+ members are back at the baseline levels from which the cuts were calculated. The coalition has agreed another collective 100,000 b/d hike in September, to be shared on a pro-rata basis, which will see Kuwait's target rise to nearly 2.82mn b/d next month. </p><p><i>Argus</i> estimates that Kuwaiti production increased by 60,000 b/d on the month to 2.79mn b/d in July. The country has been among a small handful of Opec+ producers that have been able to keep up with quota increases in recent months, with the rest of the group battling reduced capacity.</p><p>"Structural supply weaknesses caused by years of underinvestment have led to extremely limited worldwide spare capacity," al-Fares said. This is "creating extraordinary volatility in the oil markets at a time when these markets need stability like never before to allow participants to plan future production capacity increases to meet rising demand", he added. </p><p>Al-Fares also warned of a disconnect between the physical and the futures crude markets, echoing <a href="https://direct.argusmedia.com/newsandanalysis/article/2363418">comments made earlier this week by his Saudi counterpart Prince Abdulaziz bin Salman</a>. Prince Abdulaziz said Opec+ has several options to handle market challenges, "including cutting production at any time and in different forms as has been clearly and repeatedly demonstrated in 2020 and 2021". </p><p>Five Opec+ sources have told <i>Argus</i> that a formal proposal to reduce production is not on the table, but another said cuts are possible "if needed". Two of the sources noted that a decision to lower output might be made if the Iran nuclear deal is revived and sanctions on Iranian crude exports are removed.</p><p class="bylines">By Ruxandra Iordache</p></article>
