Opec+ agrees to bigger than expected monthly oil output increase
The decision marks the fourth consecutive month that the group of oil producers, led by Saudi Arabia and Russia, will raise production.
However, the latest monthly hike is a jump from the 411,000 barrels for each of May, June and July and traders had expected the same level for August.
The increase comes "in view of a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories, and in accordance with the decision agreed upon on 5 December 2024 to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments starting from 1 April 2025," Opec said in a statement on Saturday.
Opec+ said the gradual increases may be paused or reversed subject to evolving market conditions and this flexibility will allow the group to continue to "support oil market stability".
The measure will allow the eight countries of Opec+ to "accelerate their compensation," the statement said.
The group will meet next on August 3 to decide on September production levels.
The Opec+ decision comes despite oil prices languishing far below the highs of the initial days of the Russia-Ukraine war in 2022.
Oil prices started 2025 strongly. The closing price of Brent, the benchmark for two thirds of the world's oil, peaked at more than $82 a barrel on January 15, while West Texas Intermediate, the gauge that tracks US crude, hit almost $79 per barrel on that day.
Demand concerns, a slowing economy and less-than-stellar growth in China, the world's biggest crude importer, have weighed down crude prices in 2025.
US President Donald Trump's push to impose hefty tariffs on trade partners this year has been the biggest driver of declining prices.
His back-and-forth on trade and tariff policies has added to volatility in a market rattled by geopolitical concerns and wars in the Middle East that have threated to disrupt global crude supplies from the region.
The latest round of volatility was driven by the 12-day war between Israel and Iran prices rose more than 13 per cent in a week, but quickly slumped below where they were before the conflict.
US-Iran nuclear talks expected to restart in Oslo next week are adding to bearish sentiment in the market.
US news website Axios reported on Thursday that White House envoy Steve Witkoff and Iranian Foreign Minister Abbas Araghchi will be in attendance during the negotiations.
Brent, the benchmark for two thirds of the world's oil, closed 0.73 per cent lower to $68.3 a barrel on Friday, while West Texas Intermediate, the gauge that tracks US crude, was trading 0.75 per cent lower to $66.5 a barrel.
Brent settled about 0.8 per cent higher than last Friday's close and WTI was around 1.5 per cent higher.
There is still uncertainty over US tariff policies with the end of a 90-day pause on higher rates set to expire on July 9.
Washington was due to start sending letters to countries on Friday specifying tariff rates they face on goods exported to the US.
President Trump told reporters before leaving for Iowa on Thursday that the letters would be sent to 10 countries at a time, setting out levies of 20 per cent to 30 per cent, according to Reuters.
A number of nations are still negotiating trade deals with the US.
Accelerated output
The faster pace of bringing crude back to the market began in March when Opec+ said it would proceed with a 'gradual and flexible' unwinding of voluntary production cuts of 2.2 million bpd, starting in April and adding 138,000 bpd per month until September 2026.
The return of production cuts – originally agreed by eight Opec+ members including Saudi Arabia, Russia, the UAE and Iraq in November 2023 – had been pushed back several times amid concerns about growing supply in the market.
However, analysts say the market has priced in the latest increase and crude is less likely to start dipping much below the current levels.
Janiv Shah, vice president of oil markets at Rystad Energy, told The National the market 'widely expects Opec+ to announce one more month of the accelerated unwinding as the balances show a heavily undersupplied market for August due to peak demand and refinery runs, which would still remain in a deficit after extra barrels are counted in.
'The Opec+ hike has been largely priced in, as the market trades in a narrow band amid reduced risk premiums and geopolitical forces,' he added.
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