OPEC+ Agrees to Boost Output by 547,000 Barrels in September, Shifting From Oil Price Defense to Market Share Competition

At a virtual meeting last Sunday, OPEC+ reached an agreement to increase oil production by 547,000 barrels per day starting in September. This move marks the early exit from the 2.2 million bpd production cut implemented in 2023 by eight member states and incorporates the phased-in quota increases for the United Arab Emirates. According to one delegate, the meeting lasted only 16 minutes.

Three delegates stated that the group has retained the option to reassess the suspended output of roughly 1.66 million bpd, though no decision has been made. All future actions will depend on market conditions. The next meeting is scheduled for September 7.

This production increase signals a strategic pivot from defending oil prices to reclaiming market share. While geopolitical tensions and seasonal demand helped moderate oil and gasoline futures prices, offering relief to drivers and being seen as a political win for U.S. President Donald Trump, the accelerated supply has intensified concerns over a potential global surplus later this year.
A senior OPEC delegate noted that the short duration of the meeting underscored strong strategic consensus among members. The alliance remains flexible, with the capacity to halt increases or reinstate cuts if necessary.

Jorge Leon, an analyst at Rystad Energy A/S and former OPEC official, remarked that although concerns existed about price disruptions and internal cohesion, the transition has so far been orderly. However, the organization remains in a delicate balancing act over whether to release the remaining 1.66 million bpd of curtailed supply to defend its market position.

The timing coincides with heightened diplomatic pressure from Trump on Russia, a co-leader of OPEC+, threatening secondary sanctions against its oil buyers unless a Ukraine ceasefire is reached. This could disrupt Russian crude supply and contradict Trump’s own calls for lower oil prices as he urges the Federal Reserve to cut interest rates.

Russian Deputy Prime Minister Alexander Novak made a rare visit to Riyadh last Thursday to discuss bilateral cooperation with Saudi Energy Minister Prince Abdulaziz bin Salman. The two nations have jointly steered OPEC+’s direction for nearly a decade.

Back in April, oil prices plummeted to a four-year low following OPEC+’s surprise announcement to accelerate the rollback of production cuts and Trump’s “Liberation Day” tariff threats. Since then, the group has ramped up output monthly, with July’s increase aimed at meeting peak summer demand. Bloomberg previously reported that OPEC+ planned to complete the supply restoration by September.

OPEC stated in its Sunday announcement that the latest decision was driven by stable global economic prospects and robust market fundamentals, citing low crude inventories as evidence.
Recently, oil prices have recovered some ground, with Brent crude futures closing below $70 per barrel last Friday, narrowing their year-to-date decline to 6.7%. However, analysts warn that increased supply and slowing global economic growth may lead to significant oversupply by year-end. U.S. retail gasoline prices fell slightly last month.

OPEC+ officials cited several reasons for the accelerated supply restoration, including disciplining overproducing members and accommodating the Trump administration. Insiders revealed that Saudi Arabia’s primary goal is to reclaim the market share lost to U.S. shale producers and others during extended production cuts. With an August quota of 9.756 million bpd, Saudi output will rise to a nearly two-year high.

This strategic shift comes at a cost for Saudi Arabia and its allies, who have spent the past decade supporting oil prices. Declining prices could worsen the kingdom’s soaring fiscal deficit, forcing cuts to core projects in Crown Prince Mohammed bin Salman’s ambitious economic transformation plan. The IMF estimates that Saudi Arabia needs oil prices above $90 per barrel to cover government spending.

Notably, oil prices have steadily rebounded from April lows despite OPEC+’s rapid supply restoration—defying many analysts’ forecasts. The market recovery is narrowing fiscal losses for oil-exporting nations.

The resilience stems partly from OPEC+’s under-delivery on pledged output increases, as Saudi Arabia demands overproducers relinquish compensatory quotas. Strong demand, diesel shortages, the Israel-Iran conflict, and a weaker dollar have also supported prices. Still, crude traders remain skeptical about the durability of current price levels. The ultimate question remains: what will become of the 1.66 million bpd in suspended cuts?

OPEC+ has aimed to reclaim market share, but this unresolved tranche of production cuts, initiated two years ago and currently set to run through 2026, remains in limbo. Delegates offered no clarity at the Sunday meeting.

Officials noted the group could reactivate this supply, pause further increases, or even reverse recent actions if market conditions deteriorate. Helima Croft, head of commodity strategy at RBC Capital Markets, noted the message from voluntary cut participants is that all options remain open.

OPEC+ may soon need to consider reducing output. The International Energy Agency (IEA) projects a global surplus of 2 million bpd in Q4 due to cooling demand in major economies and increased supply from the U.S., Canada, Brazil, and Guyana.

Wall Street firms including JPMorgan and Goldman Sachs expect prices to fall toward $60 per barrel by year-end. Consultancy FGE anticipates OPEC+ will have to roll back recent output gains and resume cuts. Goldman Sachs predicts a production freeze as the most likely short-term scenario. A Bloomberg survey of five oil traders last week also forecast a temporary pause. However, if Riyadh is determined to regain market share, as insiders suggest, it may proceed with reactivating the 1.66 million bpd supply regardless of forecasts.

Greg Brew, senior analyst at Eurasia Group, said OPEC+ is likely to adopt a wait-and-see approach for the coming months. But if U.S. output tightens and demand remains resilient, the group may fully unwind the remaining cuts. Geopolitical tensions add to the uncertainty. Balancing Trump’s calls for lower prices with internal cohesion will require precise coordination, no matter what course of action OPEC+ ultimately chooses.