OPEC production quotas will rise again in August after seven members of the OPEC+ alliance agreed to increase collective oil output by 188,000 barrels per day, signalling growing confidence in the recovery of energy exports following the easing of tensions in the Middle East.
The decision was reached during a virtual meeting involving energy ministers from Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman. According to a statement issued by OPEC+, the production adjustment will take effect in August 2026 as oil-exporting countries continue efforts to restore output disrupted by the conflict in the Gulf region.
The latest OPEC production quotas adjustment follows months of reduced output after Iran’s actions during the Middle East conflict severely disrupted maritime traffic through the Strait of Hormuz, a vital route for global oil exports. Data released by OPEC showed that combined production from Saudi Arabia, Iraq and Kuwait declined by approximately six million barrels per day between the first quarter of 2026 and May.
The situation began improving after Tehran and Washington signed a memorandum of understanding on June 17, committing to remove obstacles affecting maritime traffic through the Strait of Hormuz while diplomatic negotiations continue.
Industry analysts say oil shipments through the strategic waterway are gradually returning to normal. Commodity analyst Giovanni Staunovo of UBS noted that current production remains below OPEC+ targets despite the recovery.
“For now, production is probably still below” the alliance’s output targets, he said.
Oil prices have also fallen sharply, returning to levels recorded before the conflict as markets anticipate a gradual restoration of supply.
According to a United States official quoted by Bloomberg, daily oil flows through the Strait of Hormuz may already have exceeded 10 million barrels. However, Ole Hansen, an analyst at Saxo Bank, explained that much of the oil currently reaching global markets had previously been stored in tankers and storage facilities.
“Shut-in production takes time to restart,” Hansen said, adding that shipping conditions are expected to improve further during July, with production recovery likely to accelerate in August.
The latest OPEC production quotas decision comes as analysts project a potential global oil surplus in 2027. Jorge Leon of Rystad Energy said markets are already anticipating excess supply next year, which could place downward pressure on international oil prices once inventories built up during the conflict are replenished.
The alliance may also face internal challenges after the United Arab Emirates exited OPEC+ in May, while countries such as Iraq continue to push for higher production limits to recover losses sustained during the conflict. According to Iraq’s Oil Ministry, the country has requested an increase in production quotas to compensate for reduced exports during the crisis.
Hansen, however, believes such a request is unlikely to receive immediate approval because production levels remain below pre-conflict capacity. He suggested Iraq’s proposal could instead form part of the 2027 capacity review, when OPEC+ reassesses production baselines based on each member’s ability to increase output.
The latest production increase reflects OPEC+’s confidence that regional stability is gradually returning and energy exports can continue recovering. However, with expectations of higher supply and softer oil prices in the coming year, the alliance faces the challenge of balancing market stability with the production ambitions of its member countries.
