OPEC+ is set to approve a further increase in oil production for the month of July during meetings scheduled for this week. This decision comes as part of the group’s strategy to meet the rising global demand for oil and strengthen its market share. The alliance, which includes the Organisation of the Petroleum Exporting Countries (OPEC) and partners like Russia, has been implementing various levels of output cuts since 2022 to stabilize the oil market, with two of these cuts expected to remain in effect until the end of 2025.
In April, eight members of the OPEC+ alliance began easing the latest round of production cuts by agreeing to increase output by 411,000 barrels per day (bpd) for both May and June. This figure was higher than initially anticipated, signaling a positive move towards meeting market demands. Sources familiar with the matter have indicated that a similar output increase is being considered for the month of July, although no official confirmation has been provided due to the sensitive nature of the discussions.
UAE Energy Minister Suhail Mohamed Al Mazrouei emphasized the group’s commitment to balancing the oil market while addressing the growing demand for oil. Global oil prices experienced a significant drop to under $60 per barrel in April, following OPEC+’s announcement of accelerated output hikes for May. Factors such as global economic uncertainty and trade tensions, including US President Donald Trump’s tariffs, contributed to the decline in prices. However, prices have since rebounded to around $65 per barrel.
Looking ahead, reports have suggested that the eight member states may consider phasing out their voluntary production cuts by the end of October, following the potential output increase for the month of July. This move indicates a gradual shift towards normalizing production levels in response to market conditions.
Overall, the discussions within the OPEC+ alliance reflect a careful balancing act between meeting market demands, stabilizing oil prices, and ensuring the long-term sustainability of the global oil market. As the meetings progress this week, it will be interesting to see how the decisions made by the alliance will impact the oil industry and global economic landscape.
