OPEC+ agrees 188,000 bpd output increase for August amid Strait of Hormuz recovery
The OPEC+ alliance agreed on Sunday to increase production targets by 188,000 barrels per day from August, the fifth consecutive monthly rise, as the gradual reopening of the Strait of Hormuz allows Gulf exports to resume.
The decision
OPEC+ ministers from seven core nations agreed on Sunday to raise production quotas by 188,000 barrels per day from August. The increase, the fifth consecutive monthly rise, comes from the unwinding of voluntary cuts first announced in April 2023. The group said the adjustment could be accelerated, suspended or reversed depending on market conditions. The next meeting is set for 2 August.
Strait of Hormuz reopening
The quota hike follows the gradual reopening of the Strait of Hormuz, which had been blocked for months during the US-Israel war on Iran. A memorandum of understanding signed on 17 June between Washington and Tehran opened 60-day talks and committed both sides to lifting obstacles to maritime traffic. Since then, oil flows through the strait have exceeded 10 million barrels per day, according to a US official cited by Bloomberg.
Production still below pre-war levels
Despite the quota increases, actual OPEC+ output remains far below pre-war levels. Production fell from 42.77 million bpd in February to 33.13 million bpd in May, according to OPEC data. It began to recover in June but is still short of earlier volumes. Ole Hansen of Saxo Bank told AFP that interrupted production takes time to restart, with July likely to show improvement and an acceleration in August.
The month of July should show an improvement, with probably an acceleration of the recovery in August.
Oil prices return to pre-war levels
Brent crude traded near $72 a barrel on Friday, down from peaks above $120 during the war. Prices have been pressured by lower Chinese imports, higher exports from non-Middle East producers, and a record global strategic stock release coordinated by the International Energy Agency. The peace pact has also convinced traders that supply will eventually normalise.
- Feb 2026
- 72 $/bbl
- War peak
- 120 $/bbl
- 3 Jul 2026
- 72 $/bbl
Market outlook
Analysts expect a production surplus in the longer term. Jorge Leon of Rystad Energy told AFP that everyone expects a surplus of production. In the short term, the rebuilding of stocks drawn down during the conflict should absorb the returning barrels. The OPEC+ statement emphasised the group's commitment to market stability and full compliance with compensation for any overproduction since January 2024.
Everyone expects a surplus of production.
- OPEC+ output at 42.77 million bpd before Strait of Hormuz closure
- Seven core members begin raising quotas by almost 800,000 bpd through July
- Output falls to 33.13 million bpd as war blocks Gulf tankers
- US-Iran memorandum of understanding signed, opening 60-day talks
- OPEC+ agrees 188,000 bpd increase for August
- Next OPEC+ meeting scheduled
