The OPEC+ alliance, which includes major oil-producing nations, has announced plans to moderately increase oil production next month. This decision comes as fuel prices reach levels not seen since before the conflict involving the U.S., Israel, and Iran.
On Sunday, OPEC+ revealed that seven member countries will collectively raise oil production by 188,000 barrels per day in August. This marks the fifth consecutive month that the alliance has agreed to boost oil outputs. The countries involved in this decision are Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman.
The alliance stated, “The countries will continue to monitor and assess market conditions.” They emphasized the importance of a cautious approach to maintain market stability.
Market optimism previously led to a decline in crude oil prices, before and after an interim deal between the U.S. and Iran aimed at ending conflict. The agreement included Iran allowing ships to pass through the Strait of Hormuz and the U.S. lifting its port blockade.
The Strait of Hormuz, previously responsible for transporting about a fifth of the world’s oil, has seen increased commercial traffic. However, shipments remain below pre-war levels, with tensions persisting. Iran’s military has warned that oil tankers must use approved routes or risk a “forceful response.”
As negotiators work towards a long-term agreement, oil prices continue to fall. Brent crude, a key international benchmark, closed under $72 per barrel on Friday. This is close to the price before the U.S. and Israel launched strikes on Iran and significantly lower than March’s peak price of nearly $120 per barrel.
The conflict led to an energy crisis, as the blockade of the Strait limited oil distribution globally. Earlier production increases pledged by OPEC+ could not fully mitigate supply disruptions. S&P Global Energy estimates suggest that Gulf oil production might not recover until at least early 2027.
Energy analysts caution that high fuel and consumer goods prices may persist beyond the conflict’s conclusion.