OPEC+ has agreed to increase its oil production by 188,000 barrels per day from August, the fifth consecutive monthly increase, as the alliance continues to gradually reverse earlier output cuts.
The decision
The agreement was reached at a virtual meeting of a group of member countries including Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman. The increase is the same size as in recent months.
Unwinding the cuts
In April 2023, several OPEC+ members announced voluntary production cuts to support prices. The group is now slowly bringing that oil back to the market, in small monthly steps, rather than all at once.
The figure refers to the increase in the daily production allowed across the participating countries — not a one-off delivery of oil.
Who is OPEC+?
OPEC+ brings together the members of the Organisation of the Petroleum Exporting Countries and allied producers, the most important of which is Russia. The alliance, formalised in 2016, coordinates production to influence global oil prices.
Why gradually?
The careful pace reflects a balancing act. Producers want to regain market share, particularly as output grows in countries outside the alliance, such as the United States and Brazil. But they also want to avoid a fall in prices that would hit their revenues. Monthly decisions allow them to adjust quickly if the market weakens.
What it means for consumers
More oil on the market can push prices down, but the effect on petrol and diesel at the pump is usually modest and delayed. Fuel prices also depend on refining margins, taxes, the euro-dollar exchange rate and distribution costs.
For the Balearics, where fuel costs are higher than on the mainland because of transport to the islands, oil prices also affect the cost of electricity generation, ferries and air travel.
Next meeting
The group will meet again on 2 August to review the market and decide whether to continue increasing production, pause or change course.
