• OPEC+ to increase oil production by 137,000 barrels per day starting October.
• The decision is seen as a move to regain market share amid weak demand forecasts.
• Oil prices have fallen by approximately 12% this year, maintaining between $65 and $70 per barrel.
• An actual production increase may be limited due to member capacities.
• This change aims to strengthen Saudi Arabia's political and economic position in the market.

OPEC+ has agreed to raise its oil production target by 137,000 barrels per day starting October, amidst fears of weakening global demand. This marks a significant shift as the group previously implemented cuts totaling nearly six million barrels per day over recent years to stabilize prices. The increase comes as OPEC+ aims to regain market share even as prices hover around $65-70 per barrel, a drop of approximately 12% this year, driven by greater output from non-OPEC nations, according to Reuters, Reuters, and India Times.

The eight core members of OPEC+, known as the "Voluntary Eight" (V8), including Saudi Arabia and Russia, reached this decision during an online meeting. They plan to unwind a tranche of cuts that had been set to remain until 2026. Oil analysts suggest that while the actual output hike appears small, the implications for market dynamics are significant. Jorge Leon, an analyst at Rystad Energy, emphasized, "OPEC+ is prioritising market share even if it risks softer prices," indicating the strategic shift is more about positioning than volume, according to Reuters and South China Morning Post.

Despite the announced increase, many analysts argue that the actual output may not significantly exceed current production levels, as most member countries are operating near their maximum capacity. Estimates suggest that while OPEC+ aims to boost output, operational limitations mean that the true increase will likely be much smaller, reflecting a gap between policy announcements and actual production realities, as noted by Reuters and Bangkok Post.

This production strategy could politically benefit Saudi Arabia, positioning it as a major player in global oil markets while supporting relationships with allies like the United States, amidst ongoing geopolitical tensions and demands for lower prices. As U.S. President Trump has exerted pressure on OPEC+ to lower prices to aid American consumers, this decision may also serve as a signal of compliance and market management, according to Reuters and Reuters.