OPEC+ to raise oil output as Gulf supply disruptions ease

By the Editorial Team · Monday, July 6, 2026

Seven OPEC+ members agreed to raise oil production quotas by 188,000 barrels per day starting in August 2026 as Gulf region supply disruptions ease following recent conflicts. This increase aims to address depleted inventories and could lead to a market surplus and downward price pressure next year, though full production recovery remains gradual.

Seven OPEC+ member countries agreed on Sunday to increase oil production quotas as supply disruptions in the Gulf region ease following a recent conflict in the Middle East. Ministers from Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman participated in a virtual meeting where they decided to raise output by 188,000 barrels per day, effective August 2026, according to a statement from the organization.

The production increase comes after months of reduced output due to the near-blockade of the Strait of Hormuz, a critical oil shipping route, which was disrupted amid ongoing hostilities in the region. This disruption, largely attributed to actions by Iran during the conflict, significantly affected Gulf countries’ ability to export oil. Data from OPEC indicates that production from Saudi Arabia, Iraq, and Kuwait fell collectively by approximately six million barrels per day between early 2026 and May.

A key turning point occurred on June 17 when Iran and the United States signed a memorandum of understanding aimed at ensuring safe maritime traffic through the Strait of Hormuz during ongoing diplomatic discussions. Since then, shipping activity has gradually resumed, prompting a notable decline in global oil prices to levels last seen before the outbreak of hostilities. A U.S. official cited by Bloomberg estimates that oil shipments through the strait may have returned to over ten million barrels per day.

However, analysts note that much of the oil leaving the strait has been sourced from strategic reserves and floating storage, with so-called "shut-in" production still requiring time to fully restart. Ole Hansen, a market strategist at Saxo Bank, stated that while shipping normalization should lead to production improvements in July, a more significant acceleration is likely in August.

Looking ahead, energy analysts anticipate a market surplus by next year as producers work to replenish inventories depleted during the conflict. Jorge Leon, an analyst from Rystad Energy, emphasized that although rebuilding stockpiles will initially absorb increased flows, there could be considerable downward pressure on prices later.

The OPEC+ group faces challenges in balancing production decisions as members push for higher quotas. Iraq has formally requested a quota increase to compensate for the production shortfall experienced during the conflict, according to the Iraqi Oil Ministry. Nonetheless, Hansen suggested that a quota adjustment is not immediately necessary since current production levels have yet to return to pre-conflict volumes. He noted that Iraq’s request might be addressed during the 2027 capacity review when member countries’ production baselines are reassessed.

The upcoming year-end review is expected to be a crucial moment for OPEC+ as it navigates internal pressures and shifting market dynamics amid the departure of the United Arab Emirates from the coalition earlier this year.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.