OPEC+ to increase oil production in August

OPEC+ will raise crude production by 548,000 barrels per day in August, stepping up its planned rollback of earlier supply cuts. The move—confirmed at the group’s July 5 meeting—marks a significant shift toward restoring global market share, with eight core members gradually reversing the voluntary 2.2 million bpd cut implemented earlier this year.

This marks the largest monthly increase since the taper began in May, when OPEC+ started adding back about 400,000–411,000 bpd per month. As of August, only 280,000 bpd of the original cuts will remain in place, although deeper baseline cuts (3.66 million bpd) agreed to last year still hold.

The oil market reacted cautiously: Brent crude hovered in the $70–$75 range in early July, with gains from Middle East geopolitical tensions offset by the prospect of rising supply and trade uncertainty between the U.S. and China.

🎯 Takeaways

1. OPEC+ is walking a tightrope between market share and price stability

The accelerated production increase in August signals a more aggressive unwinding of voluntary cuts. This suggests OPEC+—particularly key players like Saudi Arabia and Russia—are increasingly focused on regaining market share, especially in Asia, rather than propping up prices. However, too much supply too fast risks pressuring oil prices, especially if demand growth disappoints. The group appears ready to adjust month-to-month, reflecting high sensitivity to price action.

⚠️ Watch for volatility in oil prices around each monthly OPEC+ meeting—as guidance can shift quickly depending on global economic signals and inventory levels.

2. U.S. shale may not be the swing producer it once was

Even though OPEC+ is bringing barrels back online, U.S. shale output growth remains constrained due to capital discipline, labor shortages, and higher well-decline rates. Analysts argue this may limit non-OPEC+ supply growth, meaning OPEC+ could regain long-term leverage in balancing the market.

🔍 While OPEC+ production is climbing, structural limits in U.S. production may keep the market tighter than many expect—especially in 2026 and beyond.

3. Oil prices are stuck in a range—for now

Recent oil prices have been bouncing between $65 and $75 per barrel, reacting to a tug-of-war between bullish demand signals (India’s rising consumption, potential rate cuts) and bearish supply-side fears (OPEC+ increases, weaker manufacturing activity in China). Until a clear imbalance emerges, range-bound trading is likely, with sharp reactions to geopolitical shocks or macro headlines.

📉 Short-term price dips may offer buying opportunities if demand remains resilient into Q4 2025.

4. India—not China—is the demand wildcard to watch

OPEC’s latest research shows India’s oil demand growing at 3.4% in 2025, more than twice the rate of China’s. This shift reflects both demographic momentum and a relative easing of China’s industrial appetite. India could absorb much of the new OPEC+ supply, cushioning the market from oversupply fears—provided economic growth stays on track.

📊 India may emerge as the new “demand anchor” in oil markets, with implications for trade flows, refining margins, and long-term price floors.

5. Geopolitical risk remains an upside wildcard

Despite the focus on fundamentals, geopolitical tensions—from the Middle East to Russia-Ukraine—can still jolt the market. Recent Israeli strikes and Persian Gulf disruptions show how fragile supply lines remain. In this environment, traders and policymakers will continue to price in a risk premium, even if physical supply appears ample.

🛢️ Supply security is still a major theme—underscoring why OPEC+ cohesion and messaging matter even more than barrels on the water.