The Organisation of the Petroleum Exporting Countries and its allies (OPEC+) has approved a further increase in crude oil production for September, completing the phased reversal of the voluntary output cuts introduced in 2023 to stabilise the global oil market.
At its meeting on Sunday, the alliance agreed to increase production quotas by about 188,000 barrels per day for key producers, including Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman.
The decision concludes the unwinding of the 1.65 million barrels-per-day voluntary production cuts adopted in 2023. The United Arab Emirates, which was initially part of the arrangement, exited OPEC in May.
Despite several monthly production increases this year, global oil supplies have remained relatively tight due to export disruptions in the Gulf, Russia and Kazakhstan linked to conflicts involving Iran and Ukraine.
While analysts had expected OPEC+ to pause output increases during the final quarter of the year, the alliance did not provide guidance on production plans for October through December.
Attention is now expected to shift toward managing any potential oversupply once export flows return to normal, with OPEC+ likely to maintain stable production levels in the fourth quarter while preparing for negotiations on production quotas for 2027.
Following the meeting, oil prices rose, with Brent crude, Nigeria’s benchmark, settling at $90.12 per barrel, while the US West Texas Intermediate (WTI) crude closed at $84.67 per barrel. Both benchmarks gained more than one per cent after losing over five per cent the previous week on expectations of easing tensions in the Middle East.
Meanwhile, the Joint Ministerial Monitoring Committee (JMMC), which monitors compliance with OPEC+ production agreements, expressed concern over attacks on energy infrastructure during ongoing US and Israeli military operations against Iran. The committee warned that damage to critical oil facilities could be costly to repair and pose risks to global oil supplies.
Although the 2023 voluntary production cuts have now been fully reversed, OPEC+ continues to maintain another layer of output reductions amounting to about 2 million barrels per day. Those cuts, introduced in 2022, are expected to remain in place until the end of 2026.
The alliance is also reviewing the production capacity of member states ahead of negotiations on new output baselines that will determine production quotas from 2027.
The talks are expected to be closely contested, with countries such as Iraq pushing for higher production allocations to reflect expanded production capacity.
OPEC+ comprises 21 oil-producing nations, including OPEC members and non-OPEC allies led by Russia. However, monthly production adjustments are decided by a core group of seven participating countries, which is scheduled to meet again on September 6.