OPEC+ Approves Another Oil Production Quota Increase

Major members of OPEC+ have agreed to another modest increase in their collective oil production quotas for next month, raising the prospect of additional crude supplies reaching global markets if the U.S.-Iran peace agreement holds, Grant Smith, Salma El Wardany and Fiona MacDonald reported for Bloomberg News.

OPEC+ members have agreed to increase oil production quotas as they continue restoring supply to global markets.

Seven countries led by Saudi Arabia and Russia agreed during a video conference on Sunday to increase their combined production target by 188,000 barrels per day, according to an OPEC statement.

The increase is consistent with the group's plan to gradually reverse production cuts implemented several years ago.

Since the conflict began, OPEC+ has approved cumulative quota increases totaling 940,000 barrels per day, equivalent to nearly 1% of global oil demand.

Those additional volumes had largely remained theoretical because hostilities disrupted shipping through the Strait of Hormuz, limiting exports from Persian Gulf producers.

Following an interim peace agreement between Iran and the United States, Saudi Arabia and neighboring producers have begun restoring exports, contributing to a growing supply surplus in key Asian markets.

Oil futures have fallen about 43% from their wartime peak to around US$72 per barrel in London.

Some analysts now warn that a global supply glut could emerge, forcing OPEC+ members to choose between restraining production again or competing for market share.

The alliance is also facing internal strains. Iraq recently suggested it could eventually leave OPEC if it is not granted a higher production quota, while the United Arab Emirates reportedly withdrew from the organization in May over disagreements regarding production limits.