Saudi Arabia, Russia, and five other key members of OPEC+ have agreed to increase oil production by 188,000 barrels per day starting in September. Following this, the alliance plans to maintain production limits at the same level through the end of the year. This move formally concludes the cancellation of cuts made in 2023 and creates a reserve capacity for boosting exports after the end of the conflict in the Middle East.

While the increase is largely symbolic at this stage, it will enable Riyadh to swiftly ramp up supplies immediately after export routes are unblocked. The influx of additional supplies into the market is intended to lower fuel prices and alleviate global inflation risks.

The cartel’s decision comes in the wake of US President Donald Trump’s statements about refraining from new strikes on Iran in preparation for a regional peace agreement. If the Strait of Hormuz reopens, the increase in OPEC+ production could lead to a market surplus. A similar oversupply was observed during a recent short-lived ceasefire.

Logistics remain the primary barrier for exporters at this time. Ongoing hostilities are blocking the Strait of Hormuz, while Houthi attacks in the Red Sea have cut off Saudi ports from alternative routes. OPEC+ has warned that threats to maritime security continue to fuel price volatility.

The actual return of Middle Eastern oil to the market remains uncertain. The September increase technically reverses cuts amounting to around 3.5 million barrels per day (excluding the UAE’s share). However, systemic constraints prevent several countries in the alliance from reaching the permitted “paper” ceiling for actual production.