The Organisation of Petroleum Exporting Countries and its allies, commonly known as OPEC+, have agreed to further boost oil output for August, with the group deciding to keep production unchanged at its 61st Joint Ministerial meeting on July 28.
The oil cartel, which accounts for around 40 percent of world’s total crude oil production, will increase output by another 548,000 barrels per day (bpd) in August, after OPEC+ announced unwinding of production cuts from April.
How did OPEC+ increase production this year?
OPEC+ had in April started to unwind its announced output cuts of 2.2 million bpd every month. The group increased output by 138,000 bpd in April, followed by an output boost of 411,000 bpd each month in May, June and July.
Taking it a notch higher, the cartel is now ramping up output significantly by 548,000 bpd in August, and a similar production boost is expected for September as well, when it meets on August 3 to decide future output.
If a September output boost is confirmed, the group would have fully reversed the 2.2 million-barrel cuts which were announced by OPEC+ in 2023 to support crude prices.
With the August increase, OPEC+ would have only 580,000 barrels per day to be released from the announced voluntary cuts, which also includes the extra production boost of 300,000 bpd allowed to UAE by the group.
Why is OPEC+ increasing production now?
The decision to boost output by OPEC+ comes despite low crude oil prices, and is an attempt to regain market share lost to United States, Brazil, among others which have been increasing production recently. The cartel is now aiming to expand market share amid dwindling global demand and rising supplies from other nations.
The decision also comes on back of a constant push from US President Trump to boost global output so as to reduce domestic energy bills. One of Trump's biggest campaign promises was to significantly bring down energy bills for Americans, and he has been putting pressure on OPEC to ramp up supplies, while urging domestic producers to boost output.
In addition to the 2.2 million-barrel voluntary cuts, OPEC+ also has another production cut of 1.66 million barrels per day in place. Media reports have suggested that the group may consider unwinding these cuts as well, however a final decision is yet to be taken.
How have crude prices behaved?
The group’s decision to unwind production cuts in April was a shock to the oil market, as OPEC+ had been reluctant in boosting output in the past.
The group's decision to boost output in April resulted in oil prices tanking to $60 per barrel, before recovering to hover below $70. In 2025, crude oil prices have mostly traded in the range of $65-70 per barrel, thanks to a well-supplied market, as compared to an average price of $75-80 a barrel during 2024.
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