OPEC+ Lifts Oil Production Limit for September

The oil cartel OPEC+ has decided to raise its production limit for the sixth consecutive time, agreeing to an increase of 188,000 barrels per day for September. This decision signals a continued shift away from production cuts implemented in 2023.

However, experts suggest that this increase may not necessarily translate to more oil entering the global market. Several countries, including Saudi Arabia, have recently struggled to meet their assigned production quotas. This shortfall is partly attributed to the ongoing tensions and partial blockade of the critical Strait of Hormuz shipping lane, through which a significant portion of Saudi oil is transported.

The price of Brent crude oil has seen a notable increase of approximately 26 percent since late February, coinciding with escalating tensions involving the U.S., Israel, and Iran. Currently, Brent crude is trading around $88 per barrel.

The September increase will finalize the gradual rollback of a 1.65 million barrel per day cut agreed upon in 2023. Reports indicate that OPEC+ circles suggested no further increases were planned for the remainder of the year due to potentially difficult negotiations over new quotas. Some members, such as Iraq, are advocating for higher individual quotas to reflect their increased production capacities.

Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman are among the core OPEC+ group adhering to this September increase. The United Arab Emirates exited the alliance in May, seeking greater production volumes than previously allocated. The core group is scheduled to meet again on September 6.