OPEC+ has agreed to boost oil output by an additional 188,000 barrels per day starting in August, continuing a trend of monthly production increases. This marks the fifth consecutive rise in output quotas, bringing total increments since the war began to nearly 940,000 barrels daily. The expansion reflects a broader effort to reverse earlier production cuts as supply tightness concerns soften.
Oil prices have eased significantly, with Brent crude now trading around $72 per barrel, down from the April peak near $126. This price adjustment coincides with increased production from Gulf states and the easing of supply disruption fears following the reopening of the Strait of Hormuz, a critical oil transit chokepoint. Saudi Arabia has ramped up shipments to an average of 6.3 million barrels per day, reaching almost 90% of pre-war export levels.
The United Arab Emirates has surpassed its pre-war oil export volumes after formal withdrawal from OPEC+ in May. June shipments of crude and condensate totaled approximately 3.94 million barrels a day. According to energy intelligence company Kpler, the UAE’s rising exports have been supported by both production growth and strategic drawdowns of crude inventories, further bolstering supply available to global markets.
Despite the increase in supply, analysts from major financial institutions like Morgan Stanley and Goldman Sachs warn that persistent output gains without corresponding demand could push the oil market into a surplus next year. China's role remains uncertain; as the world’s largest oil importer, its crude purchases from the Middle East—historically about half of its imports—have declined sharply. Data shows China’s shipments dropped to their lowest in nearly a decade in April, with overall imports down by roughly five million barrels per day compared to pre-war levels, and little evidence of a rebound in buying activity so far.
Adding to supply dynamics, more than 60 million barrels of previously stuck oil have recently entered the market following a U.S.-Iran memorandum of understanding. Bloomberg reported that UAE crude has been shipped as far as the United States, including offers to buyers in Hawaii, highlighting the global reach of the expanded Gulf exports.