• OPEC+ will increase oil production by 547,000 barrels per day starting in September.
• The decision aims to regain market share amid concerns about Russian supply disruptions.
• Oil prices have fluctuated as market reactions set in following OPEC+’s announcement.

On August 3, OPEC+ agreed to raise oil production by 547,000 barrels per day for September, a move intended to reclaim market share in response to low inventories and a strong economic outlook. This production adjustment marks the early unwinding of a previous cut of 2.2 million bpd that had been in place for several years. OPEC+ cited favorable market conditions as a rationale for the increase, indicating this is part of a broader strategy to restore their market presence amid rising global demand and unstable supplier conditions linked to Russia, according to Reuters.

The eight key producers that form the Voluntary Eight (V8), including Saudi Arabia, Russia, and the UAE, reached this consensus at a virtual meeting, amid U.S. pressures urging India to halt its Russian oil purchases. The group started cautiously lifting output in April with increasing volumes in subsequent months, culminating in this September production hike, as they attempt to balance the market amidst fluctuating prices, reports Reuters and India Times.

Despite the announcement, analysts are cautious. Actual output is expected to yield around 1.7 million bpd due to production cuts from other member countries that had previously overproduced. The anticipated increase could temporarily ease crude prices that have stabilized around $70 per barrel, though market reactions have so far shown little change in prices, according to Reuters and Reuters.

Market volatility remains a concern, particularly with geopolitical tensions influencing oil availability; recent reports indicated disruptions in Russian oil shipments headed to India due to U.S. sanctions. President Trump has been vocal about employing 100% secondary tariffs on Russian crude buyers, which could substantially reshape the market dynamics, as emphasized by Reuters and Channel News Asia.