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Seven OPEC+ members decided Sunday to raise oil production quotas again, as Gulf countries recover from output cuts caused by the Middle East war and disruptions around the Strait of Hormuz.
Ministers from Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman met virtually and agreed to implement a production adjustment of 188,000 barrels per day, OPEC+ said in a statement.
The adjustment will take effect in August 2026, the organization said.
Gulf countries were forced to cut output after the near-paralysis of the Strait of Hormuz during the Middle East war, which blocked oil exports for several months.
Between the first quarter of 2026 and May, combined production by Saudi Arabia, Iraq and Kuwait fell by about 6 million barrels per day, according to OPEC data.
On June 17, Tehran and Washington signed a memorandum of understanding committing them to removing obstacles to maritime traffic in the Strait of Hormuz for the duration of talks after the signing.
Giovanni Staunovo, a commodity analyst at Swiss bank UBS, reportedly told Agence France-Presse (AFP) that "for now, production is probably still below" OPEC+ targets.
Since the memorandum of understanding was signed, ship transport in the region has slowly recovered. Oil prices have dropped sharply to levels seen before the war, as markets expect a gradual return to normal.
Oil supplies through the Strait of Hormuz may already have exceeded 10 million barrels per day, according to a U.S. official quoted by Bloomberg.
But Saxo Bank analyst Ole Hansen said the oil now leaving the strait has so far been sitting in tankers or storage facilities, adding that "shut-in production takes time to restart."
"Assuming shipping continues to normalize, July will show an improvement with August probably being the month where the pickup accelerates," Hansen told AFP.
Rystad Energy analyst Jorge Leon told AFP that "for next year, everybody is anticipating a surplus."
Rebuilding inventories used during the conflict could help absorb the additional supply at first, but producers may later face stronger downward pressure on prices.
OPEC+, already weakened by the United Arab Emirates' departure from the group in May, will also have to manage falling prices while members push for higher production.
Iraq has asked OPEC+ to raise production quotas to make up for the shortfall it suffered during the Middle East war, the Iraqi Oil Ministry said in late June.
Hansen said the need for a higher quota "is not imminent" because production volumes remain far from pre-conflict levels.
"Iraq's request may become part of the 2027 capacity review, where production baselines will be examined," he said.
OPEC+ is due at the end of the year to reassess members' quotas based on their ability to produce more, a process that could become difficult for the group.
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