[PARIS] Opec+ is considering accelerating its oil production revival even more rapidly than expected during a virtual meeting on Saturday (Jul 5), delegates said.
Saudi Arabia has guided the Organization of the Petroleum Exporting Countries (Opec) to increase supplies by 411,000 barrels a day over the past three months, and the group is now weighing an even bigger boost in August.
The assertive strategy, allowing the group to reclaim market share from non-Opec+ producers, comes despite the risk of a global oversupply that could further pressure prices. Oil’s recent decline offers a win for US President Donald Trump, who sees lower prices as a way to ease costs for inflation-hit consumers.
Eight key alliance members are now weighing a boost of over 500,000 barrels per day, according to one delegate. That would allow Opec+ to complete the return of 2.2 million barrels a day of previously halted output by September, earlier than originally planned, another said. They requested anonymity as the discussions are private.
Brent futures hovered near US$68 a barrel in London on Friday, down 13 per cent over the past two weeks. A shift from open conflict between Israel and oil heavyweight Iran to a fragile truce has left Middle Eastern energy exports largely unaffected.
“With Opec+ having pivoted to a market share over a price defence strategy, it may be pointless to keep a notional voluntary cut in place,” said Harry Tchilinguirian, group head of research at Onyx Capital Group. “It could be best to get it over faster, and simply move on.”
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Since April, Opec and its partners have pivoted from years of output restraint to reopening the taps, surprising crude traders and raising questions about the group’s long-term strategy. Saturday’s video conference was moved up by a day for scheduling reasons.
Delegates cited a range of motivations for the shift: accommodating peak summer fuel demand, curbing overproduction by some members, and clawing back market share from rivals like US shale producers. Officials say Riyadh is especially eager to restart idled output as quickly as possible.
The additional barrels may be welcomed by President Trump, who has consistently pushed for lower oil prices to support the US economy and tame inflation, while pressuring the Federal Reserve to reduce interest rates.
Still, the ramp-up risks deepening a developing supply surplus, potentially driving prices to levels that could financially strain producers.
Global oil inventories have been rising at a pace of about one million barrels per day in recent months, as Chinese demand cools and production climbs across the Americas-from the US and Guyana to Canada and Brazil.
The International Energy Agency projects a sizeable market surplus later this year. Wall Street firms including JPMorgan Chase and Goldman Sachs forecast that prices may drop to US$60 a barrel, or lower, by the fourth quarter. Opec+is considering accelerating its oil production revival even more rapidly than expected during a virtual meeting on Saturday, delegates said. BLOOMBERG
