OPEC+ determines a more gradual boost in oil production for October, amounting to 137,000 barrels daily

OPEC+ Increases Crude Oil Production Amid Global Economic Stability

In a significant move, the Organization of Petroleum Exporting Countries (OPEC) and its allies (OPEC+) have decided to increase crude oil production, marking a shift in their strategy towards recovering market share by accepting lower prices.

The decision, adopted in a teleconference by the energy ministers of Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman, aims to increase production by 137,000 barrels per day (bpd) for October. This is the seventh increase since April, with the first increase also being 137,000 bpd.

The global economic outlook remains stable, as indicated by OPEC in its statement, but analysts are expressing concerns about the downward pressure on oil prices due to the increased production. The OPEC+ decision to increase production by 2.6 million bpd since April represents around 2.5% of global demand.

However, the increase is smaller than in recent months due to a weakening global demand. Factors contributing to this include concerns about demand in the United States, geopolitical and commercial risks, and the impact of tariffs on petroleum consumption.

Venezuela, Iran, and Libya have been exempt from the commitment to adjust their production due to involuntary limitations in their oil industries. Venezuela, for instance, has faced sanctions and internal conflict, leading to its exclusion from the OPEC+ production commitment since 2016.

The U.S. intermediate petroleum (WTI) fell 2.25% to $61.87 during the same period, reflecting the market's response to the increased production. The Brent crude oil barrel closed the last session of the week at $65.50, 2.2% lower than at the end of Thursday.

OPEC+ was formed in 2016, consisting of the original five OPEC members (Saudi Arabia, Venezuela, Iran, Iraq, and Kuwait) along with additional countries. The alliance includes Algeria, Nigeria, Libya, Equatorial Guinea, Congo, Gabon, the United Arab Emirates, Russia, Mexico, Kazakhstan, Azerbaijan, Oman, Bahrain, Brunei, Malaysia, Sudan, and South Sudan.

Analysts at Commerzbank predict that a new increase in OPEC+'s oil supply would exert significant downward pressure on oil prices. As the situation develops, it will be interesting to see how the global oil market responds to this strategic move by OPEC+.

OPEC+ determines a more gradual boost in oil production for October, amounting to 137,000 barrels daily