OPEC+ boosts September production by 188,000 barrels/day
The increase, decided by the key countries in the enlarged Organisation of the Petroleum Exporting Countries (OPEC), was widely expected by analysts.
OPEC+ has agreed to increase oil production by 188,000 barrels per day starting in September, as reported by a joint statement from Saudi Arabia, Russia, and five other key members. The decision comes amid disruption caused by the ongoing conflict in the Mideast. Jorge Leon, an analyst at Rystad Energy, stated that the increase is a response to the unwinding of voluntary cuts, but cautioned that the real market impact will come when normal export flows resume, due to the ongoing blockade of the Strait of Hormuz by Iran.
Giovanni Staunovo, an analyst at UBS, noted that many OPEC+ members are unable to meet their production targets due to a decline in production capacity. The September increase completes the unwinding of the second of three production-cut packages introduced by the organization. Some member countries, such as Iraq, may want to significantly boost production, while Russia faces challenges due to repeated Ukrainian drone attacks on its oil infrastructure.
OPEC+ is set to discuss new production quotas starting next year, following a series of production cuts aimed at reducing total output by nearly six million barrels per day between 2022 and 2023.
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