OPEC+ has once again accelerated its oil production strategy, moving its key meeting from Sunday to Saturday, July 5, 2025, to discuss a potential fourth consecutive monthly output increase of 411,000 barrels per day (bpd) for August. This decision, reported by OilPrice.com and confirmed by OPEC+ delegates, reflects the group’s aggressive push to reclaim market share while addressing internal compliance issues among members like Iraq and Kazakhstan. With global oil demand projected to grow by 740,000–775,000 bpd in 2025, OPEC+ is betting on a tight market to absorb additional supply, despite recent price pressures. Let’s dive into the details, including a breakdown of 2025 year-to-date production by member.
Why the Early Meeting and Output Hike?
The decision to bring the meeting forward by a day was attributed to scheduling conflicts, but the real focus is on the proposed output hike. According to OilPrice.com, OPEC+ is considering another 411,000 bpd increase for August, following similar hikes in May, June, and July. This would bring the cumulative increase since April to 1.78 million bpd, as the group unwinds 2.2 million bpd of voluntary cuts initiated in 2023. The eight members driving these hikes—Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman—are motivated by two key goals:
- Market Share Recovery: After years of production curbs totaling over 5 million bpd, OPEC+ leaders, particularly Saudi Arabia and Russia, are prioritizing volume over price to compete with non-OPEC producers like U.S. shale.
- Disciplining Non-Compliant Members: Chronic overproduction by Iraq and Kazakhstan has frustrated the group, with Saudi Arabia signaling it may tolerate lower prices to enforce compliance.
However, actual supply increases have lagged behind announced figures due to uneven compliance. Iraq has made efforts to compensate for past overproduction, while Kazakhstan has openly defied quotas, citing obligations to foreign operators like Chevron. This dynamic has kept effective output additions below the headline 411,000 bpd per month, a critical factor for traders monitoring real market impact.2025
Oil Demand and Price Dynamics
OPEC+ justifies these hikes by citing “healthy market fundamentals” and low global oil inventories. The International Energy Agency (IEA) forecasts 2025 oil demand growth at 740,000 bpd, while a Reuters poll estimates 775,000 bpd. Seasonal summer demand, driven by travel and air conditioning needs in the Middle East, supports the group’s confidence. Yet, oil prices remain under pressure, with Brent crude trading around $65 per barrel after dipping to a four-year low below $60 in April, partly due to U.S. tariffs and economic uncertainty.
Analysts like Jorge Leon of Rystad Energy see Saudi Arabia’s strategy as a dual play: punishing non-compliant members while aligning with U.S. calls for lower prices ahead of President Trump’s Middle East visit in May. However, this risks squeezing budgets for high-cost producers, including some OPEC+ members and U.S. shale operators, as prices below $65 strain their fiscal breakevens.2025 Year-to-Date Output by OPEC+ Member
Tracking OPEC+ production in 2025 is complex due to varying compliance levels and limited real-time data. Below is an estimated breakdown of year-to-date (YTD) crude oil output for key OPEC+ members through June 2025, based on available reports from Reuters, OilPrice.com, and OPEC statements. Note that these figures are approximate, as actual production often deviates from quotas due to overproduction or underperformance. The table focuses on the eight members’ unwinding cuts, plus other notable producers.
|
Country
|
YTD Output (million bpd, Jan–Jun 2025)
|
Notes
|
|---|---|---|
|
Saudi Arabia
|
54.0
|
Leading hikes, but enforcing compliance; output near 9.0 mbpd monthly
|
|
Russia
|
54.6
|
Slightly above quota, pushing for hikes; ~9.1 mbpd monthly
|
|
Iraq
|
24.6
|
Overproduced but compensating; ~4.1 mbpd monthly
|
|
UAE
|
19.8
|
Increasing by 300,000 bpd total; ~3.3 mbpd monthly
|
|
Kuwait
|
15.0
|
Compliant, steady at ~2.5 mbpd monthly
|
|
Kazakhstan
|
9.6
|
Defying quotas, ~1.6 mbpd monthly, angering OPEC+
|
|
Algeria
|
5.5
|
Compliant, ~0.9 mbpd monthly
|
|
Oman
|
5.0
|
Compliant, ~0.83 mbpd monthly
|
|
Iran
|
19.2
|
Exempt from cuts, steady at ~3.2 mbpd monthly
|
|
Venezuela
|
4.8
|
Limited by sanctions, ~0.8 mbpd monthly
|
|
Nigeria
|
8.4
|
Underproducing due to infrastructure issues, ~1.4 mbpd monthly
|
Sources: Reuters, OilPrice.com, OPEC reports. YTD figures are estimated by multiplying reported monthly averages by six months. Data subject to revision.
Total OPEC+ output in April 2025 was approximately 27.24 million bpd, down 200,000 bpd from March, per a Bloomberg survey, highlighting the gap between announced hikes and actual supply. Kazakhstan’s defiance and Iraq’s partial compliance have reduced the effective increase, while Iran, Venezuela, and Libya remain exempt from cuts due to sanctions or instability.
What’s Next for OPEC+ and Oil Markets?
The July 5 meeting will set the tone for August production and beyond. If approved, the 411,000 bpd hike will push OPEC+ closer to unwinding its 2.2 million bpd voluntary cuts by November, with potential for further increases in September and October if compliance remains poor. However, Saudi-Russian tensions, as reported by Reuters, could complicate decisions. Russia, alongside Oman and Algeria, has at times advocated for pausing hikes due to demand concerns, though it recently signaled flexibility for August.For oil markets, the stakes are high. Additional supply could keep Brent below $70, challenging high-cost producers and potentially triggering a price war with U.S. shale. Conversely, a unified OPEC+ front could stabilize prices if compliance improves. Traders will closely watch the July 5 outcome, particularly for signals on Kazakhstan’s compensation plans and Saudi Arabia’s tolerance for low prices.
Conclusion
OPEC+’s decision to move its meeting to July 5 and consider another output hike underscores its shift toward market share over price support. While the group projects confidence in 2025 demand growth, internal divisions and external pressures—like U.S. tariffs and shale competition—pose risks. The YTD production data reveals a mixed picture of compliance, with Kazakhstan’s defiance offsetting gains from disciplined members like Saudi Arabia. As the oil market braces for more supply, Energy News Beat will keep you updated on how these moves reshape global energy dynamics.
We have to wonder about the group’s ability to produce any access to oil production. There has been a massive lack of investment from the entire group into new capex drilling programs, and we will see how this plays out. Can OPEC+ even increase prodcution as people claim there is plenty of spare capasity? In my opinion no, and that has been on of the reasons I am still a perma-bull. The world needs more capital invested in drilling programs just to meet normal decline curves.
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