OPEC+ weighs another big oil output hike for July
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OPEC+ may raise oil output by 411,000 bpd in July, marking a third straight monthly hike as Saudi Arabia pressures quota violators.
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The logo of the Organization of the Petroleum Exporting Countries (OPEC) is seen outside of OPEC's headquarters in Vienna, Austria, March 3, 2022. (AP/Lisa Leutner)
OPEC+ members are considering a super-sized oil output hike for July, potentially marking the third consecutive month of increased supply as the group continues to enforce discipline within its ranks.
The proposal, currently under discussion ahead of the bloc’s June 1 meeting, includes a production boost of 411,000 barrels per day, three times higher than originally scheduled, according to delegates familiar with the talks.
This would mirror the increases already set for May and June, as OPEC+ accelerates its supply revival to penalize quota violators and rebalance market dynamics. The group, led by Saudi Arabia, has warned overproducing members that continued noncompliance could trigger further hikes, risking lower prices for all.
The strategy marks a notable policy shift. Saudi Arabia, typically cautious about oversupplying the market, is now leveraging output hikes as a tool of enforcement. At the last meeting, Riyadh issued a stern warning: members ignoring quotas may face intensified production from compliant nations.
The timing of these hikes has had an immediate impact on global oil prices. When the first surprise supply bump was announced in April, coinciding with the launch of US President Donald Trump's trade war, Brent crude plunged to a four-year low near $60 a barrel.
Prices have since rebounded slightly, with Brent trading just under $65 on Thursday following a partial rollback of tariffs by the White House.
Oil prices rebound but bearish outlook looms
Despite the recovery, the outlook for oil demand in the second half of 2025 remains cautious. The International Energy Agency (IEA) recently forecast that global demand growth would slow through the remainder of the year, citing “economic headwinds” despite a strong first quarter.
Global oil demand growth is set to slow over the rest of 2025 amid economic headwinds & record EV sales
— International Energy Agency (@IEA) May 15, 2025
At the same time, world oil supply looks on track to rise by considerably more
More in our May Oil Market Report ⬇️ https://t.co/ka8DXzo1uG
Many analysts now expect OPEC+ to tread carefully in the coming months. While supply increases can serve geopolitical goals and punish internal noncompliance, they also risk exacerbating a fragile market recovery, especially if macroeconomic conditions weaken.
