OPEC+, a coalition led by Saudi Arabia and Russia, recently faced internal disagreements over oil production policies. Saudi Arabia pushed for a quicker increase in output, while Russia preferred to pause, citing concerns about demand. Despite these differences, a compromise was reached to raise production by 411,000 barrels per day starting in July, matching increases from the previous two months.
This decision comes as OPEC+ continues to gradually reverse voluntary cuts enacted over the past five years, which were designed to stabilize oil markets. The group has already agreed to add a total of 1.37 million barrels per day this year, but still maintains nearly 4.5 million barrels per day in cuts, equivalent to about 4.5% of global demand.
Saudi Arabia has the largest spare capacity in the group and can quickly ramp up output, while Russia faces challenges due to reduced investment and sanctions. Some OPEC+ members, including Kazakhstan and Iraq, have exceeded their quotas, adding complexity to the ongoing negotiations.
Following the announcement, oil prices rose as markets responded positively to the decision to maintain a steady pace of production increases. OPEC+ continues to play a significant role in global oil supply, balancing the interests and capacities of its diverse members.