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🇳🇬 Nigeria /Energy & Infrastructure

OPEC+ raises quotas again as Middle East calms

From The Punch · () English

Summarized and contextualized by DistantNews.

At a glance

News Named sources New plan
  • Seven OPEC+ members, including Saudi Arabia and Russia, agreed to increase oil production quotas by 188,000 barrels per day starting in August 2026.
  • The decision comes as Gulf countries experienced reduced output due to the near-paralysis of the Strait of Hormuz during the Middle East war.
  • Analysts anticipate a potential oil surplus next year, which could pressure prices, and OPEC+ faces the challenge of managing member demands for increased production.

Seven OPEC+ member countries have agreed to raise their oil production quotas by 188,000 barrels per day, with the adjustment set to be implemented in August 2026. The decision was made during a virtual meeting on Sunday involving ministers from Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman.

this adjustment will be implemented in August 2026

— OPEC+Stated in the official OPEC+ statement regarding the production quota adjustment.

This move follows a period where Gulf countries, particularly Saudi Arabia, Iraq, and Kuwait, had to significantly cut output. Their combined production fell by approximately six million barrels per day between the first quarter of 2026 and May. These cuts were necessitated by disruptions to oil exports through the Strait of Hormuz, which experienced near-paralysis orchestrated by Iran during the recent Middle East conflict.

for now, production is probably still below targets

— Giovanni StaunovoCommodity analyst at UBS, commenting on current production levels relative to OPEC+ targets.

However, with the signing of a memorandum of understanding between Tehran and Washington on June 17, which commits both parties to facilitating maritime traffic, shipping in the region has shown signs of recovery. Oil prices have also dropped, reflecting expectations of a gradual return to normalcy. According to a U.S. official cited by Bloomberg, oil supplies through the Strait of Hormuz may have already surpassed ten million barrels per day.

shut-in production takes time to restart

— Ole HansenSaxo Bank analyst, explaining the challenges in resuming oil production after disruptions.

Despite the improving shipping situation, restarting "shut-in production" takes time, according to Saxo Bank analyst Ole Hansen. He anticipates July will show improvement, with August likely seeing an accelerated pickup. Looking ahead to next year, analysts like Jorge Leon of Rystad Energy foresee a potential oil surplus. This could put downward pressure on prices, especially as OPEC+, which recently saw the UAE depart, must manage these sliding prices while members like Iraq push for higher quotas to compensate for previous shortfalls.

Assuming shipping continues to normalise, July will show an improvement with August probably being the month where the pickup accelerates

— Ole HansenSaxo Bank analyst, forecasting the pace of oil supply recovery.
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Originally published by The Punch. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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