OPEC+ to Raise August Oil Output by 188,000 bpd as Brent Falls

OPEC+ agreed on Sunday to lift its August oil production target by 188,000 barrels per day, the fifth consecutive monthly increase by the same seven members. The decision, announced after a virtual meeting of Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman, takes effect in August and sets up another review on 2 August 2026.

The seven producers are unwinding the additional voluntary adjustments announced in April 2023, a 1.65 million bpd tranche later extended through the end of 2026. Each monthly increase has looked small against the disruption left by the US-Israel war on Iran, yet this one lands as Brent crude slides back below the price the day before the war began. The cuts that could not be returned for two years are now being released into a market that already expects a surplus next year.

Seven Countries, 188,000 Barrels a Day, One Virtual Meeting

Energy ministers and officials from Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman met by video conference on 5 July 2026 to review global market conditions, according to the July 5 OPEC+ statement. The 188,000 bpd adjustment will be implemented in August 2026 from the additional voluntary cuts announced in April 2023. It is the same pace the group has run since March.

The decision continues a graduated phase-out that started after a November 2023 round of cuts, when a string of bank collapses had triggered a sell-off in oil and other commodities. The Sunday statement said the seven countries “will continue to closely monitor and assess market conditions” and “reaffirmed the importance of adopting a cautious approach and retaining full flexibility to increase, pause or reverse the phase out.” The next meeting is scheduled for 2 August 2026.

One familiar member is no longer at the table. The United Arab Emirates withdrew from OPEC and the wider OPEC+ alliance effective 1 May 2026, so this decision is signed by seven countries rather than the previous eight. The compensation window for any overproduced volumes since January 2024 has been extended to the end of December 2026, and the next meeting will also weigh conformity with the Declaration of Cooperation.

How the 188,000 bpd Splits Up Across the Seven Producers

The seven country-level increments add to 188,000 bpd. Saudi Arabia and Russia get the largest shares, at 62,000 bpd each, with smaller producers absorbing the remainder.

The table accompanying the OPEC statement sets out the August required production levels, expressed as the monthly increment each country will add. Iraq receives a 26,000 bpd increase, Kuwait 16,000 bpd, Kazakhstan 10,000 bpd, Algeria 6,000 bpd and Oman 5,000 bpd. The implied required production levels for August are 10.416 million bpd for Saudi Arabia, 9.887 million bpd for Russia, 4.405 million bpd for Iraq, 2.660 million bpd for Kuwait, 1.618 million bpd for Kazakhstan, 1.001 million bpd for Algeria and 836,000 bpd for Oman.

Why the Quota Is Still Mostly a Paper Promise

For most of 2026, the quota and the real barrel have been two different things. Total OPEC+ production fell from 42.77 million bpd in February to 33.13 million bpd in May, according to OPEC figures cited by Al Jazeera, as Iran’s effective closure of the Strait of Hormuz choked exports out of the Gulf. The unwinding of the April 2023 cuts is only now meeting an actual physical market that can absorb the volume.

Actual barrels have been constrained for months by the Strait of Hormuz blockade, falling well short of the quota. That constraint is now easing, driving prices down.

That framing comes from Fabien Yip, a market analyst at IG in Sydney, in comments to Al Jazeera. His point is that quotas have been running ahead of real production for months; the latest increase simply lets the announced level catch up to the physical one.

Neil Crosby, an oil market analyst at Sparta Commodities in Singapore, was blunter in the same outlet. He called the OPEC quotas “essentially meaningless” in the short term, and warned that agencies’ 2027 balance estimates “are all predicated on scenarios in Hormuz.” Crosby said the question is not what OPEC+ wants to produce but whether the Strait stays open long enough for those volumes to clear.

Why Prices Are Falling Faster Than the Cuts

Brent crude futures for September delivery stood at $72 at 02:01 GMT on Monday, according to Al Jazeera, below the $72.48 settlement on 27 February 2026, the day before the US and Israel launched strikes on Iran. Brent briefly dipped under that pre-war level on Thursday, with the BBC reporting a low below $72.48 before prices edged back to $73.23. The drop tracks the gradual reopening of the Strait of Hormuz, with a permanent end to the Iran conflict still uncertain.

Traffic through the Strait of Hormuz, which before the war carried about one-fifth of global oil and liquefied natural gas supplies, is recovering slowly. MarineTraffic data cited by Al Jazeera showed 38 confirmed transits on 2 July, down from 48 on 1 July and well below the roughly 130 daily crossings recorded before the war. Movement has picked up since US President Donald Trump and Iranian President Masoud Pezeshkian signed a memorandum of understanding on 17 June, but it remains a fraction of pre-conflict flow.

• Brent crude at $72 on Monday 6 July, below the $72.48 pre-war settlement (Al Jazeera)
• $126 a barrel peak reached briefly in April as the war disrupted Gulf exports (Al Jazeera)
• 38 confirmed transits of the Strait of Hormuz on 2 July, versus roughly 130 daily crossings before the war (MarineTraffic via Al Jazeera)
• OPEC+ output fell from 42.77 million bpd in February to 33.13 million bpd in May (OPEC via Al Jazeera)
• ~50 million barrels of Iranian crude have been pushed to market since the US naval blockade lifted (Yip to Al Jazeera)

Saxo Bank, in a Monday statement, said Brent was “weighed down by continued flows through the Strait of Hormuz and after OPEC+ backed another 180,000 barrels a day increase from next month.” The bank added that Saudi Arabia’s exports have already surged close to pre-war levels and that hedge funds have cut their net long position in Brent crude futures to near historical lows.

Analysts are split on whether demand will absorb the supply. Giovanni Staunovo, commodity analyst at UBS, told Gulf News he expects OPEC+ to keep unwinding at the same pace but that “production is probably still below the group’s targets.” Ole Hansen, head of commodity strategy at Saxo Bank, told Gulf News that “assuming shipping continues to normalise, July will show an improvement, with August probably being the month where the pickup accelerates.” Waleed Said, technical analyst at GivTrade, told Rigzone that demand is now the key test, “especially with weaker Chinese import concerns and uneven global consumption.” The BBC reported that Brent slipping below its pre-war level will eventually feed through to pump prices, with the RAC predicting UK petrol falling below 150p a litre in the next week.

The 2027 Surplus Already on the Horizon

What worries analysts most is the next calendar year. Jorge Leon, an analyst at Rystad Energy, told Gulf News that “for next year, everybody is anticipating a surplus.” Samer Hasn, senior market analyst at XS.com, told Rigzone the market “may be shifting from supply scarcity to oversupply, as major exporters accelerate production now that the Strait of Hormuz remains open,” though he added that this oversupply thesis “holds only as long as oil continues flowing freely from the Middle East, and only if the current de-escalation proves durable.”

The physical side of the market does not yet look oversupplied. According to the US Energy Information Administration, total US crude inventories including the Strategic Petroleum Reserve fell to 743.3 million barrels in the week ending 19 June 2026, the lowest level since October 1984. Nagham Hassan, market analyst at eToro, told Gulf News that inventories still falling rather than rebuilding suggests the market is tighter than current prices imply. An estimated 67 million barrels of Iranian oil have become eligible for export under a US sanctions waiver, according to Kpler estimates cited by Gulf News.

Looking further out, the EIA’s June Short-Term Energy Outlook assumes Hormuz shipping resumes in the third quarter of 2026 but does not reach pre-conflict traffic until early 2027. It forecasts Brent averaging $79 a barrel in 2027, down from the elevated levels of 2026. The EIA’s June Short-Term Energy Outlook also projects world liquid fuels consumption to fall by 1.1 million bpd over 2026 before rebounding by 2.5 million bpd in 2027. The 2027 surplus argument hinges on that rebound failing to match the supply that is finally able to flow.

What OPEC+ Itself Is Now Arguing About

The next round of decisions is about who produces, not just how much. Iraq has already asked OPEC+ to raise its production quota to compensate for output lost during the conflict, according to the Iraqi Oil Ministry cited by Gulf News. Hansen told Gulf News that there is little urgency to approve that request because Iraq’s production has yet to recover to pre-war levels. Iraq’s request is more likely to surface during the 2027 capacity review, where production baselines will be examined and contested.

The compensation schedule sits alongside the quota path. The OPEC statement confirms the compensation period for any overproduced volume since January 2024 has been extended until the end of December 2026, monitored by the Joint Ministerial Monitoring Committee. The 2 August meeting will review market conditions, conformity and compensation at the same time. Each monthly decision from here is also a decision on who gets how much of the capacity the Strait is allowing back online.

Frequently Asked Questions

How much is OPEC+ raising output for August?

OPEC+ agreed on 5 July 2026 to lift production by 188,000 barrels per day from August, the fifth consecutive monthly increase at the same pace. The decision covers Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman.

Why does the increase matter if actual production has been lower than the quotas?

The Strait of Hormuz is reopening after the US-Iran memorandum of understanding on 17 June 2026, and Saudi exports have surged close to pre-war levels. Analysts at IG and Sparta Commodities told Al Jazeera that quotas are now catching up to barrels that can actually be delivered, not the other way round.

When is the next OPEC+ meeting?

The seven OPEC+ countries are scheduled to meet again on 2 August 2026 via video conference, according to the 5 July OPEC statement, to review market conditions, production conformity and compensation.

What does this mean for petrol prices?

Brent has slipped below its 27 February 2026 settlement of $72.48 a barrel for the first time since the war began. Pump prices typically lag crude, and the BBC reported that the UK’s RAC expects petrol to fall below 150p a litre in the next week, with diesel moving under 160p.

Could OPEC+ pause or reverse the increase?

Yes. The 5 July OPEC statement says the group retains “full flexibility to increase, pause or reverse the phase out of the voluntary production adjustments.” The next review is on 2 August 2026.