ISLAMABAD: On Saturday, OPEC+ members, including Saudi Arabia, Russia, and six other key producers, announced a sharp increase in crude oil production for July. The group plans to raise output by an additional 411,000 barrels per day, matching the production targets set for May and June. This new increase is more than three times greater than what was initially planned by the coalition. The decision marks a major shift from previous agreements aimed at limiting production to boost prices.
Background on OPEC+ Production Cuts and Changes
Over the past several years, the 22-nation OPEC+ group had coordinated to reduce daily oil production by 2.2 million barrels. This strategy was designed to tighten supply in the market and support higher oil prices globally. However, in early 2025, the coalition’s leading members, often referred to as the “Voluntary Eight” or V8, decided to gradually increase production. This gradual output rise was soon accelerated, reflecting changing market dynamics and member interests.
Impact on Oil Prices and Market Outlook
As a result of the increased supply, oil prices have dropped sharply, falling to around $60 per barrel—the lowest in four years. This decline is notable because it challenges the previous price stability maintained by OPEC+ cuts. Market analysts are now closely watching how these production changes will affect global oil markets in the coming months, including the potential impact on energy costs and inflation worldwide.
