OPEC+ is considering a third straight oil production increase for July, potentially raising output by 411,000 barrels per day—triple the initial plan. A final decision will be made at the June 1 meeting. The group’s recent hikes for May and June have contributed to falling oil prices, with crude dropping to $64.31 a barrel on Thursday.
OPEC+ claims its output hikes are demand-driven, but insiders cite motives like disciplining over-producers, regaining market share, and appeasing political pressures. Saudi Arabia has warned non-compliant members, notably Kazakhstan, which continues near-record exports. Morgan Stanley’s Martijn Rats expects another 411,000 bpd increase in July, noting little change in compliance and market absorption of past hikes.
Most analysts in a Bloomberg survey expect OPEC+ to approve a 411,000 bpd hike in July, while a few foresee a smaller 138,000 bpd rise. Earlier hikes, tied to Trump’s trade war, pushed oil prices to a four-year low. Despite some recovery, market outlooks remain bearish, with the IEA forecasting slower demand and Goldman Sachs expecting OPEC+ to pause further hikes after July.
Eight key OPEC+ members will meet virtually on June 1 to decide July output, with the full 22-member group holding earlier talks on May 28 to review future quotas. Analysts suggest a swift shift toward boosting market share over price control may be likely.
