The global oil market is showing signs of robust demand, according to United Arab Emirates Energy Minister Suhail al-Mazrouei, who recently stated that the market is “thirsty” for additional OPEC+ barrels. Speaking at a biennial OPEC seminar, Mazrouei highlighted that despite recent production increases by OPEC+, global oil inventories have not significantly built up, signaling strong absorption of the added supply. This perspective comes as OPEC+ accelerates its production hikes, with a planned increase of 548,000 barrels per day (bpd) for August and a potential 550,000 bpd boost in September, including a 300,000 bpd quota rise for the UAE. However, questions linger about whether OPEC+ members can deliver on these ambitious targets, as some countries may be approaching their maximum production capacities.
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OPEC+ Production Push: A Response to Market Signals
OPEC+, responsible for roughly half of the world’s oil supply, has been unwinding production cuts implemented since 2022 to support prices. The group began reversing these cuts in April 2025 with an initial increase of 138,000 bpd, followed by 411,000 bpd hikes in May, June, and July. The August decision to add 548,000 bpd reflects confidence in “healthy market fundamentals” and low global oil inventories, as cited by the OPEC Secretariat. The UAE’s Mazrouei emphasized that the lack of inventory buildup indicates the market’s ability to absorb these additional barrels, driven by strong summer demand, particularly from Asia.
Watch the UAE energy minister talking about decline rates and the need for additional investment and the oil price needed for such investment. Underinvestment is a serious problem #Opec pic.twitter.com/Mp0MXfe1Cx
— Anas Alhajji (@anasalhajji) July 9, 2025
Are OPEC+ Members Maxed Out?
While OPEC+ projects confidence, concerns are mounting about the group’s ability to sustain these production increases. Some members may be nearing their maximum capacity, and actual output often falls short of announced ceilings. According to energy analyst Amena Bakr, the 548,000 bpd increase for August represents a rise in production quotas, not necessarily real-world output. Many OPEC+ countries, including Iraq and Kazakhstan, have struggled to meet their quotas due to underinvestment, aging infrastructure, or geopolitical constraints.For instance, Kazakhstan’s production surged to 1.88 million bpd in June, exceeding its OPEC+ quota of 1.5 million bpd, largely due to Chevron’s expansion of the Tengiz field. However, Kazakh authorities have admitted they cannot enforce cuts on foreign-led projects, highlighting compliance issues. Similarly, Iraq has faced pressure to reduce output to compensate for prior overproduction, which partially offsets gains from Saudi Arabia and the UAE. Russia, another key player, is constrained by sanctions and a focus on Asian markets, limiting its ability to ramp up exports.
Implications for Global Oil Markets
The discrepancy between announced and actual production adds another layer of uncertainty. As noted in Energy News Beat, fears of a market glut may be overblown since many OPEC+ members are pumping below their quotas. This gap could stabilize prices by preventing a flood of new barrels, but it also underscores the group’s limited spare capacity. If key producers like Saudi Arabia and the UAE hit their ceilings, OPEC+ may struggle to respond to unexpected demand spikes or supply disruptions.
Strategic Dilemma: Market Share vs. Price Stability
OPEC+ faces a strategic dilemma: prioritize market share or defend higher prices. Saudi Arabia and the UAE appear to be leaning toward volume maximization, as evidenced by their aggressive quota increases. However, this approach risks depressing prices, especially if non-OPEC supply—particularly U.S. shale—continues to grow. The U.S., the world’s largest producer, is competing for market share, and its shale output could further pressure OPEC+ margins.
Conclusion: A Tightrope for OPEC+
The UAE’s assertion that the oil market craves more OPEC+ barrels reflects a moment of optimism about global demand. However, the group’s ability to deliver on its production promises is far from guaranteed. With some members nearing capacity limits and others grappling with compliance issues, OPEC+ is walking a tightrope between capturing market share and maintaining price stability. As autumn approaches, the market will closely watch whether actual output matches announced hikes and how this delicate balance impacts prices. For now, the oil market remains resilient, but the risks of oversupply—or underdelivery—loom large.
Sources: OilPrice.com, Energy News Beat, Reuters, Bloomberg
