The eight OPEC+ participants involved in voluntary production cuts have announced a further rewinding of those cuts, putting downward pressure on oil prices.
In a brief online meeting in early August, the eight countries agreed a further increase in production of 547,000 barrels per day (bpd) for September. The United Arab Emirates also secured a separate production increase. The full series of output hikes is equivalent to about 2.4% of global oil demand – around 2.5 million bpd.
The sizeable cuts by the OPEC+ countries have helped support oil prices, but members have lost market share in the process. For example, ExxonMobil, the maker of the Mobil SHC gear oil range, has been growing production in Guyana. OPEC+ published a statement following the meeting pointing to low levels of inventory and a steady economic outlook as justification for releasing more barrels to the market.
Rystad Energy’s Jorge Leon, who also used to work for OPEC+, said that in unwinding its biggest layer of production cuts without sending oil prices plummeting:
“OPEC+ has passed the first test: But the next task will be even harder: deciding if and when to unwind the remaining 1.66 million barrels, all while navigating geopolitical tension and preserving cohesion.”
In addition to the 1.66 million bpd of remaining voluntary cuts, there is a further layer of 2 million bpd of cuts spread across all OPEC+ participants. The eight members will meet again in September to decide on the first layer, which is currently due to run to the end of 2026.
