OPEC+ Unveils Larger-Than-Expected Oil Production Increase in August; Algeria to Contribute Additional 12,000 Barrels Daily

On Saturday, eight nations within the OPEC+ alliance reached a consensus to elevate their combined crude oil production by 548,000 barrels per day, marking a significant step in the gradual rollback of voluntary supply reductions.

This group, which includes major oil producers such as Russia and Saudi Arabia, along with Algeria, Iraq, Kazakhstan, Kuwait, Oman, and the United Arab Emirates, convened virtually earlier in the day. Their prior expectations had suggested a more modest increase of 411,000 barrels per day.

According to a statement from the OPEC Secretariat, the decision to raise August production levels by 548,000 barrels daily was driven by “a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories.” Notably, Algeria’s share of crude oil production will rise by 12,000 barrels per day starting next August, contributing to this overall increase.

The eight nations have been executing two sets of voluntary production cuts that fall outside the formal policies of the broader OPEC+ coalition. One of these measures, which involves a reduction of 1.66 million barrels per day, will remain in effect until the end of the following year.

The second strategy saw these countries reduce output by an additional 2.2 million barrels per day until the end of the first quarter. Initially, they aimed to increase production by 137,000 barrels per day each month until September 2026, but only maintained that pace through April. Subsequently, the group escalated the increase to 411,000 barrels per day for May, June, and July, and is now further ramping up production in August.

Recent weeks have witnessed a temporary surge in oil prices, fueled by the seasonal summer demand spike and the 12-day conflict between Israel and Iran, which posed risks to Tehran’s oil supplies and raised concerns about potential disruptions in shipments through the critical Strait of Hormuz.

As of the close of trading on Friday, oil futures settled at $68.30 per barrel for the September-expiration Ice Brent contract and at $66.50 per barrel for the front-month August Nymex U.S. West Texas Intermediate crude.