OPEC+ Considers Larger Oil Output Hike for July Amidst Internal Tensions
OPEC+ is expected to discuss a potential increase in oil production for July that could exceed the 411,000 barrels per day (bpd) increments seen in May and June, according to sources familiar with the ongoing talks. This consideration comes as the group navigates the delicate balance of market stability, internal discipline, and a strategy by leaders Saudi Arabia and Russia to regain market share.
Eight key OPEC+ countries have already been accelerating their output faster than initially planned, a move that has put some downward pressure on oil prices. While these members may stick to the 411,000 bpd increase for July, the possibility of an even larger hike is on the table.
A significant factor influencing these discussions is Kazakhstan’s recent stance that it does not intend to cut its production. Kazakhstan has consistently pumped hundreds of thousands of barrels over its OPEC+ target for months, a point of contention that has reportedly angered other members and contributed to the group’s decision to accelerate output hikes in recent months. OPEC+ has urged Kazakhstan to compensate for its overproduction, but the country has maintained its position, arguing it will produce according to its capacity. This defiance may sway the upcoming meeting towards a larger overall output increase.
The potential for a more substantial output hike comes as oil prices have recovered to around $65 per barrel, after falling to a four-year low below $60 in April. That earlier dip was influenced by the accelerated OPEC+ output plans and concerns over global economic weakness driven by U.S. tariffs.
OPEC+, which comprises OPEC members and allied producers like Russia, has previously implemented significant output cuts since 2022 to bolster the market. However, eight members began unwinding some of these cuts in April. As United Arab Emirates Energy Minister Suhail Mohamed Al Mazrouei indicated, OPEC+ aims to balance the oil market while also being mindful of rising demand.
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