NEW YORK — Seven nations within the OPEC+ oil-producing alliance have agreed to modestly increase their oil output next month, adding more supply to global markets at a time when fuel prices have dropped to levels not seen since before the conflict between the U.S., Israel, and Iran.
The Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC+, announced Sunday that the combined production increase would total 188,000 barrels per day starting in August. This marks the fifth month in a row that the alliance has agreed to raise output levels.
The seven nations participating in Sunday’s agreement are Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman.
In a statement, the group said: “The countries will continue to monitor and assess market conditions, and in their continuous efforts to support market stability, they reaffirmed the importance of adopting a cautious approach.”
Over the past month, growing optimism in financial markets sent crude oil prices falling both before and after the U.S. and Iran reached a temporary agreement to halt hostilities. Under a broader memorandum of understanding, Iran agreed to allow vessels to pass freely through the Strait of Hormuz, while the U.S. agreed to lift its blockade of Iranian ports.
Commercial ship traffic through the strait has been increasing since the deal was reached. Before the war, the waterway served as a passage for roughly one-fifth of the world’s oil supply. However, ship movement has not yet returned to pre-war levels, and tensions remain. As recently as Thursday, Iran’s joint military command issued a warning that oil tankers traveling through the strait must follow its approved routes or face a “forceful response.”
Oil prices have kept falling as negotiators from Iran and the U.S. work toward a permanent peace agreement. Brent crude, the international oil benchmark, closed below $72 per barrel on Friday — close to where prices stood before the U.S. and Israel launched strikes on Iran in late February, and far below the peak of nearly $120 per barrel seen in March.
The conflict sparked an energy crisis across much of the world. With shipping largely blocked in the Strait of Hormuz, the modest production increases OPEC+ had pledged in previous months were not enough to offset the disruption to global oil supplies.
Early in the war, many major Middle Eastern oil producers were forced to cut output because they had nowhere to send their crude. A recent estimate from S&P Global Energy projected that Gulf oil production would not fully recover until at least the first quarter of 2027.
Energy analysts have repeatedly cautioned that fuel prices and the cost of everyday consumer goods are likely to remain high well after the conflict officially ends.
