OPEC+ to Raise Oil Production Quotas for September

OPEC+ member states agreed on Sunday to raise oil production quotas by 188,000 barrels per day in September. Analysts had expected the decision, which applies to seven alliance members: Algeria, Iraq, Kazakhstan, Russia, Kuwait, Oman and Saudi Arabia. This is the sixth consecutive month in which OPEC+ has increased quotas, and previous increases were of a similar size.

Although the decision has been made, it is still unclear when the group will actually be able to boost output. Analysts point out that several countries are struggling to reach previously agreed targets. The situation is especially difficult in the Gulf region: because of the Iran war, traffic through the Strait of Hormuz — a vital route for energy trade — has been almost completely halted, although ship movements briefly increased after the US-Iran memorandum of understanding was signed in June.

Some members, such as Iraq, have voiced a desire to significantly expand production. Russia, meanwhile, continues to suffer from repeated Ukrainian drone attacks on its oil infrastructure; output is currently about nine million barrels per day, against a target of 9.8 million barrels per day.

OPEC+ has shifted course in recent years. Between late 2022 and 2023, fearing lower oil prices, the alliance agreed to cut production in three separate rounds, reducing total output by nearly six million barrels per day. Since last year, however, several major producers — including Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, Oman and the United Arab Emirates — changed their approach and began gradually increasing output, before the latest departure from the group on 1 May.