Seven OPEC+ members voted on Sunday to increase their oil production quotas as tensions ease in the Middle East. Ministers from Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman held a virtual meeting and agreed to boost output by 188,000 barrels per day starting in August 2026, the group announced.
The Gulf nations had slashed production after Iran's actions disrupted shipping through the Strait of Hormuz during regional conflict, cutting off their oil exports for months. Combined output from Saudi Arabia, Iraq, and Kuwait dropped by roughly six million barrels daily between early 2026 and May, OPEC data showed.
A turning point came on June 17 when Tehran and Washington signed a memorandum of understanding to clear obstacles blocking maritime traffic in the strait. "For now, production is probably still below" OPEC+ targets, Giovanni Staunovo, a commodity analyst at UBS, told AFP.
Since that agreement, ship movement through the region has picked up gradually, with oil prices tumbling sharply to pre-war levels. A US official told Bloomberg that supplies passing through this shipping corridor may have already surpassed ten million barrels daily.
However, the crude leaving the strait has largely remained stored in tankers and storage tanks so far. Ole Hansen, an analyst at Saxo Bank, explained that "shut-in production takes time to restart" and expected meaningful recovery in July, with August potentially showing faster gains.
Looking ahead, analysts warn of fresh challenges for the cartel. "For next year, everybody is anticipating a surplus," Jorge Leon from Rystad Energy told AFP.
Rebuilding reserves that nations depleted during the conflict should initially absorb extra supplies, but producers may later face intense downward pressure on prices. OPEC+ already faces strain after the United Arab Emirates quit the group in May.
Iraq has specifically pushed the cartel to raise production quotas to recover losses suffered during the Middle East war, the Iraqi Oil Ministry said in late June. Hansen argued this increase "is not imminent" since output volumes remain well below pre-conflict levels.
"Iraq's request may become part of the 2027 capacity review, where production baselines will be examined," he added. The cartel plans to reassess member quotas by year's end based on their production capacity, a decision that could spark tension among members.
