OPEC+ to Raise Output by 188,000 Barrels a Day in September, Ending Voluntary Cuts

【Financial News, New York = Lee Byung-chul】 OPEC Plus (OPEC+), the group of major oil-producing countries including the Organization of the Petroleum Exporting Countries (OPEC) and Russia, has decided to increase crude oil production by 188,000 barrels per day starting in September. With this move, the voluntary output cuts that had been phased in since 2023 have now fully ended. However, markets expect the actual boost in supply to be limited, as export disruptions among major producers continue amid the Iran war and the Russo-Ukrainian war.
On the 3rd local time, OPEC+ said it held a meeting of its seven key member countries and decided to add about 188,000 barrels per day to production quotas starting in September.
The increase involves seven countries: Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman. It is the final step in reversing the voluntary cut of 1.65 million barrels per day agreed in 2023.
Still, the consensus is that the amount of crude actually reaching the market will be far smaller than the planned increase. That is because export disruptions in the Persian Gulf region, Russia and Kazakhstan, driven by the Iran war and the Russo-Ukrainian war, have meant that most of OPEC+'s monthly output increases this year have not translated into higher exports.
Attention is now shifting to production policy for the fourth quarter. Before the meeting, there had been speculation within OPEC+ that the group would likely pause output increases through the end of the year. But the statement released on the day did not mention any production plan for October through December.
Markets are now leaning toward the possibility that the pace of production increases will be slowed for the time being.
Jorge León, head of geopolitical analysis at Rystad Energy, told CNBC, "OPEC+ has completed the unwinding of its voluntary cuts," adding, "The new challenge is managing a potential supply glut if oil exports return to normal."
OPEC+ also held a meeting of the Joint Ministerial Monitoring Committee (JMMC) on the day and expressed concern over attacks on energy facilities during the war between the United States, Israel and Iran. The committee noted that energy facilities require significant time and money to repair, which could also affect crude oil supply.
Meanwhile, OPEC+ consists of 21 countries, including OPEC members and non-OPEC producers such as Russia. Recent monthly production adjustments have been led by the seven key countries, including Saudi Arabia. The countries are scheduled to meet again on Sept. 6 to discuss future production policy.




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