OPEC+ is set to increase production by 188,000 barrels a day from September

The main OPEC+ countries have approved a small increase in their production quotas, a move that will complete the theoretical restoration of supplies disrupted in 2023 and give them the leeway to add further barrels once the war in the Middle East has ended.

Seven members, led by Saudi Arabia and Russia, have agreed to increase their collective target by a further 188,000 barrels per day next month, the group said at the end of a video conference held on Sunday. The group has increased its quotas every month during the war with Iran, despite supplies from the region remaining constrained by the conflict. OPEC+ currently plans to keep levels unchanged for the rest of the year following the September increase.

Although the increase is symbolic for the time being, it could give Saudi Arabia the opportunity to boost production once oil flows from the Persian Gulf return to normal, helping to replenish depleted global stocks. The contraction in supply triggered by the conflict is causing drive up the cost of fuels such as petrol and diesel, fuelling fears of a fresh surge in inflation.

Any increase in supply by the Organisation of the Petroleum Exporting Countries (OPEC) and its partners could help reignite fears of a growing surplus that emerged during last month’s ceasefire between the United States and Iran. The United Arab Emirates’ withdrawal in May, following years of frustration with the limits imposed by OPEC, has also fuelled speculation about a possible future battle for market share within the group.

OPEC will continue to hold monthly meetings, the next of which is scheduled for 6 September.