OPEC+ approves higher-than-expected Aug crude quota hike

The eight members of the OPEC+ producer group that are implementing voluntary crude output cuts agreed July 5 to increase quotas by 548,000 b/d in August, OPEC said in a statement.

The group is increasing quotas faster than expected, citing a steady global economic outlook and healthy market fundamentals.

Ahead of the meeting, analysts expected the group, which includes Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman, to agree to a third 411,000 b/d quota increase.

"The gradual increases may be paused or reversed subject to evolving market conditions. This flexibility will allow the group to continue to support oil market stability," OPEC said.

OPEC+ is bringing barrels back to market at a time of high seasonal demand, but analysts warn that there will be significant oversupply in the second half of 2025.

S&P Global Commodity Insights analysts forecast a surplus in the market of more than 1 million b/d by year-end, with OPEC+ fully unwinding the voluntary production cuts by October.

The group next plans to meet Aug. 3 to discuss September production levels.

They also confirmed their intention to fully compensate for any overproduced volume since January 2024, OPEC said.