OPEC+ oil production increase accelerates as markets brace for potential glut

OPEC+ oil production increase has been approved for an additional ↑ 188,000 bpd starting in August, the fifth straight monthly quota rise as the cartel unwinds earlier cuts.

OPEC+ oil production increase marks fifth consecutive monthly rise

Since the conflict began, total quota expansions total roughly 940,000 bpd, pushing Brent crude to around ↓ $54 per barrel, now near $72, well below the April peak of $126.

Saudi Arabia, the world’s leading exporter, returned to an average of 6.3 million bpd last week, restoring about 90% of its pre‑war flow. The United Arab Emirates, which left the alliance on May 1, shipped 3.94 million bpd in June, overtaking its pre‑conflict level, according to Reuters.

Analysts at Morgan Stanley and Goldman Sachs caution that the surge could tip the market toward a glut by next year if demand does not keep pace.

“Supply is outpacing demand, and the risk of a prolonged oversupply scenario is real,” said a senior market strategist.

China, the largest oil importer, remains a wildcard; its imports from the Middle East fell to a ten‑year low in April, despite a modest rebound.

Meanwhile, more than 60 million barrels stranded by the war have re‑entered the market after the U.S.–Iran memorandum, a development highlighted by Bloomberg. UAE cargo now reaches as far as the United States and even Hawaii.

The lingering effects of the pandemic continue to shape global demand patterns, adding another layer of uncertainty.

Dispatch from Luna Croft (Special Coverage Journalist).
(Note: Luna Croft is covering this desk while Victor Hale is on annual vacation.)