On Sunday, Aug. 3rd, OPEC+ announced an increase in oil production by 547,000 b/d effective September 2025, marking a continuation of accelerated output increases aimed at reclaiming market share. In their statement after the meeting, OPEC+ pointed to a robust economy and low inventory levels as key factors influencing its decision.
This decision fully reverses the group's largest previous output cuts and includes an additional increase in production from the UAE, for a total increase of around 2.5 million b/d, or about 2.4% of global demand.
The group started increasing production in April with a modest rise of 138,000 b/d. This was followed by larger-than-expected increases of 411,000 b/d in May, June, and July, 548,000 b/d in August, and now 547,000 bpd for September.
The announcement followed a brief virtual meeting attended by eight OPEC+ members and comes in the context of growing US pressure on India to cease its imports of Russian oil. This pressure is part of Washington's broader strategy to urge Moscow to engage in peace negotiations concerning Ukraine, with President Donald Trump expressing a desire for this to occur by Aug. 8.
Brent oil futures are hovering around $68–69/bbl with bearish sentiment, after OPEC+ announced it will raise production.
With oil prices around $70/bbl, OPEC+ is bolstered by a sense of confidence in the market fundamentals, stated Amrita Sen, co-founder of Energy Aspects. She noted that the market structure also suggests limited stock availability.
"So far the market has been able to absorb very well those additional barrels also due to stockpiling activity in China," said Giovanni Staunovo of UBS. "All eyes will now shift to the Trump decision on Russia this Friday."
“Whatever metric or dashboard you look at, the market currently lacks clear direction, with uncertainty lingering as the US prepares potential measures against Russia and buyers of Russian oil,” said Mariano Alonso, Vice President, Commodity Markets Analysis at Rystad Energy.
“A new oil diplomacy is emerging, with markets beginning to recognize where alliances lie. India and China are likely to maintain their purchase patterns, with little incentive to turn to the US for answers as trade negotiations unfold.”
Mariano Alonso also states that the oil market may encounter a bearish outlook if demand is affected by uncertainties surrounding tariffs, OPEC+ supply increases, a Russian ceasefire occurs, and refineries enter heavy maintenance. This combination of events could create a "perfect storm", similar to second-half 2018, leading to a sharp price decline.
