OPEC+ to Boost Oil Production by 547,000 Barrels Daily from September

On August 3, 2025, the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, announced that eight member nations will increase oil production by 547,000 barrels per day starting in September. This decision marks an early conclusion to voluntary production cuts that were initially set to continue until September 2026.

The countries involved in this production increase are Saudi Arabia, Russia, Iraq, the United Arab Emirates (UAE), Kuwait, Kazakhstan, Algeria, and Oman. This move follows a similar increase of 548,000 barrels per day implemented in August 2025. OPEC+ cited a steady global economic outlook and low oil inventories as primary reasons for the production boost. The group also indicated that these adjustments might be paused or reversed depending on evolving market conditions.

Following the announcement, oil prices experienced a slight decline. Brent crude futures fell by 43 cents to $69.24 per barrel, and U.S. West Texas Intermediate (WTI) dropped by 39 cents to $66.94 per barrel. Analysts suggest that the market has so far absorbed the additional supply without significant price disruption.

The United States Oil Fund (USO), which tracks the price of oil, is currently trading at $77.46, down 2.15% from the previous close. Major oil companies such as Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) have also seen slight declines in their stock prices, with XOM at $109.64 (down 1.81%) and CVX at $151.40 (down 0.19%).

The production increase comes amid geopolitical tensions, including U.S. threats of sanctions on Russian oil buyers due to the ongoing war in Ukraine. President Donald Trump has threatened steep tariffs on Russian crude buyers, leading to the diversion of oil shipments originally destined for India. Nonetheless, India has pledged to continue purchasing Russian oil.

OPEC+ has previously adjusted production levels in response to global economic conditions and geopolitical events. For instance, in 2020, the group implemented significant production cuts to stabilize prices during the COVID-19 pandemic. The current increase reflects a strategic shift towards regaining market share amid evolving global dynamics.

OPEC+ emphasized that the production boost could be paused or reversed depending on market conditions. The involved countries plan to reconvene on September 7.

Analysts from RBC Capital Markets noted that actual increases since April have mostly come from Saudi Arabia and the UAE, and that market conditions have so far absorbed the additional supply without significant price disruption.

Goldman Sachs has maintained its forecast for Brent crude oil prices, projecting an average of $64 per barrel in Q4 2025 and $56 in 2026. However, the bank warns of increasing risks that could affect these estimates. On the upside, mounting pressure on Russian and Iranian oil due to sanctions and a faster-than-expected reduction in spare capacity could drive prices higher. Conversely, downside risks stem from weak U.S. economic indicators, higher U.S. tariffs, and potential new trade barriers, which could temper oil demand growth, forecasted at 800,000 barrels per day annually for 2025-2026.