OPEC+ Set to Raise Output Again—Even as Members Can't Pump It
OPEC+ Set to Raise Output Again—Even as Members Can't Pump It.
OPEC+ is expected to approve another production target increase when eight key producers meet on August 2, extending a months-long campaign to unwind voluntary supply cuts that have existed largely on paper since the Iran war upended Gulf exports.
Reuters reported Thursday that Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan, and Oman are expected to raise their combined September production target by another 188,000 barrels per day, matching the increases announced for June, July, and August.
Why are OPEC+ production quotas increasing while output falls?
The problem is that quotas have been rising while actual production has been moving in the opposite direction.
According to OPEC's own data, the group produced 36.28 million bpd in June, down from nearly 43 million bpd before the war began in February. Repeated disruptions to shipping through the Strait of Hormuz, followed by renewed attacks on vessels in the Red Sea, have prevented several Gulf producers from restoring exports despite higher official targets.
Brent crude topped $100 a barrel Thursday after Houthi attacks on Saudi-linked tankers raised fresh concerns about traffic through the Bab el-Mandeb Strait. Saudi Arabia shifted much of its crude exports to the Red Sea after Hormuz became unreliable. That alternative route is now coming under pressure as well.
If approved, September's increase would complete the rollback of the 1.65 million bpd voluntary production cut adopted in 2023, adjusted for the UAE's departure from OPEC earlier this year. Reuters calculations show the seven producers will have restored roughly 1.15 million bpd of quotas since April.
Iraq remains constrained by export bottlenecks. Kazakhstan has begun cutting production after drone attacks shut down tanker loadings at the Caspian Pipeline Consortium terminal on the Black Sea, forcing operators to reduce upstream flows. Russia continues to face refinery disruptions from Ukrainian drone strikes. Saudi Arabia has available production capacity but faces growing risks to its export infrastructure.
The production increases still serve a purpose. Higher quotas signal that OPEC+ intends to replace lost barrels as soon as export routes allow it.
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Sinergia Empresarial continuará el seguimiento de esta información sobre oPEC+ Set to Raise Output Again—Even as Members Can't Pump It y ampliará la cobertura conforme se confirmen nuevos elementos relevantes para el ecosistema empresarial.
