OPEC + countries will increase oil production in the month | Oil and Gas News

Seven OPEC+ members, including Saudi Arabia and Russia, to increase output by 188,000 barrels per day.

OPEC+ members have announced plans to boost oil production as energy markets show signs of recovery in the wake of the US-Israel conflict over Iran.

OPEC+ said on Sunday that seven member countries – Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman – will raise output by 188,000 barrels per day from August after officials held a meeting to “review the global market situation”.

The increase in production is the fifth consecutive increase announced by the seven members of OPEC + in several months, continuing the gradual production of the announced 2023.

OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC) and its oil producing partners – including Russia, Bahrain and Oman – reduced output in April 2023, and in November 2023, amid the collapse of the banking system that led to a large sale of oil and other products.

“States will continue to closely monitor and evaluate the market situation,” the government watchdog said in a statement, adding that the authorities “reaffirmed the need to follow a prudent approach and maintain full flexibility to increase, suspend or change part of the voluntary reforms”.

The seven member states added that they would meet again on August 2 to review the situation.

After rising slightly to $126 a barrel in April, Brent crude oil prices have returned to pre-war levels in recent days as hopes grow of an end to the Iran conflict and a return to normal traffic in the Strait of Hormuz.

Traffic has been going smoothly since US President Donald Trump and Iranian President Masoud Pezeshkian signed their memorandum of understanding on ending the war on June 17, although it remains under tension before it begins.

There were 38 confirmed crossings in the river on July 2, down from 48 on July 1, according to vessel tracking platform MarineTraffic, compared to about 130 crossings each day before the war.

Brent crude futures on September 27 stood at $72 as of 02:01 GMT on Monday, below the Brent price of $72.48 on February 27, the day before the US and Israel attacked Iran, starting a war.

Iran’s effective closure of the Strait of Hormuz, which carries about a fifth of the world’s oil and liquefied natural gas before the war, forced OPEC+ members to reduce production because the number of barrels not exported increased the number of storage facilities.

Total OPEC+ production fell to 33.13 million bpd in May, from 42.77 million bpd in February, according to OPEC figures.

Fabien Yip, a market analyst at IG in Sydney, Australia, described the latest OPEC+ cuts as “paper strategies” based on global conditions affecting supply.

“The actual barrels have been blocked for several months due to the closure of the Strait of Hormuz, a real shortage,” Yip told Al Jazeera.

“The pressure is now decreasing, and the prices are decreasing.

“Saudi Arabia has doubled the volume of shipments since June 17 compared to the previous three months, and Iran has pushed nearly 50 million barrels of its oil into the market since the embargo was lifted,” Yip added, referring to the US military blockade of Iranian ports.

“Add more OPEC+ barrels to the scrap, along with lower Chinese demand and more US and Russian exports, and the setup is a long-term increase.