Seven OPEC+ nations, including Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman, will increase their collective oil output target by 188,000 barrels a day for July 2026. This decision continues a series of symbolic quota increases, bringing production targets closer to pre-conflict levels, though actual output remains below targets due to earlier disruptions in the Middle East, particularly the blockage of the Strait of Hormuz.
This marks the second consecutive monthly increase of 188,000 bpd, following a similar raise for June. The larger group of OPEC+ previously agreed in April 2023 to voluntary output adjustments, which are now being gradually phased out. The production schedule shows Saudi Arabia and Russia each increasing output by 62,000 bpd, Iraq by 26,000 bpd, Kuwait by 16,000 bpd, Kazakhstan by 10,000 bpd, Algeria by 6,000 bpd, and Oman by 5,000 bpd. These countries have also committed to compensating for any overproduced volumes since January 2024, extending the compensation period until the end of December 2026.
Analysts like Giovanni Staunovo from UBS and Jorge Leon from Rystad Energy predict a continued unwinding of production cuts at a similar pace. While the immediate impact on global supply might be limited due to the time it takes to restart shut-in production, expectations are high for improved output in August, especially as maritime traffic in the Strait of Hormuz normalizes. The recent memorandum of understanding between Tehran and Washington to remove obstacles in the strait is a key factor, with US officials noting that oil supplies through this channel may already exceed ten million barrels a day.
Despite the increases, real production remains below the group's targets. The gradual recovery of the Middle East region from conflict-related disruptions, which saw a drop of about six million barrels per day in production from Iraq, Kuwait, and Saudi Arabia between Q1 2026 and May, is seen as a positive sign. However, the market anticipates a surplus for 2027, potentially leading to downward pressure on prices, especially with the United Arab Emirates having left OPEC+ in May. Iraq has also requested higher quotas to recover from wartime shortfalls, a matter that may be addressed in the 2027 capacity review.
OPEC+ members emphasize a cautious approach and flexibility to adjust production based on evolving market conditions, including the option to reverse previous adjustments. They will continue to hold monthly meetings to assess market conditions and ensure compliance. The next meeting is scheduled for July 5, 2026.
