OPEC+ boosts September output by 188,000 barrels/day

Saudi Arabia, Russia and five other OPEC+ members agreed in an online meeting Sunday to raise oil production by 188,000 barrels per day from September, Al-Monitor reported.

A joint statement said, "The seven participating countries decided to implement a production adjustment of 188 thousand barrels per day." The increase, agreed by Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman, was widely expected by analysts and came against a backdrop of disruption caused by the Mideast war.

Al-Monitor said Gulf oil supplies have been disrupted through the Strait of Hormuz, at the entrance to the Gulf. It said Gulf countries have struggled to increase exports because of the near-paralysis of the strait orchestrated by Iran during the war, despite a brief upswing in shipping traffic after a US-Iran memorandum of understanding was signed in June.

Jorge Leon, an analyst at Rystad Energy, said, "OPEC+ has finished unwinding its voluntary cuts. The next challenge is managing the surplus that could emerge as export flows normalise." He added that "today's decision changes little in the near term because (the Strait of) Hormuz remains constrained. The real market impact will come when normal export flows resume."

Giovanni Staunovo, an analyst at UBS, said many OPEC+ members cannot produce as much oil as their official targets allow because of a "decline in production capacity." Al-Monitor said it remains unclear when the group will actually be able to increase its oil volumes, while some members, including Iraq, have expressed a desire to significantly boost production.