(Bloomberg) — Major OPEC nations have agreed in principle to another token increase in their production quotas for September, a move that would complete the theoretical revival of supplies halted in 2023 and give them scope to add more barrels once the Middle East war ends.
Seven members led by Saudi Arabia and Russia are likely to agree to boost their collective target by a further 188,000 barrels a day next month, two delegates said before a video conference on Sunday. The group has raised quotas each month throughout the Iran war even as supply from the region remains constrained by the conflict.
While the increase would be symbolic for now, it may give Saudi Arabia leeway to raise production once oil flows from the Persian Gulf return to normal, helping to replenish the world’s depleted stockpiles. A supply squeeze triggered by conflict is pushing up the cost of fuels like gasoline and diesel, stoking fears of another spike in inflation.
President Donald Trump said this weekend the US will hold off new strikes against Iran after the Islamic Republic and other Middle Eastern nations told him they’re working toward a deal.
An eventual supply boost by the Organization of the Petroleum Exporting Countries and its partners could help to rekindle a temporary surplus that emerged during last month’s ceasefire between the US and Iran, an oversupply some forecasters anticipate returning later this year. The exit of the United Arab Emirates in May, following years of frustration with OPEC-imposed limits, has also spurred speculation the group could one day be plunged into a contest over market share.
(Updates with detail after second paragraph.)
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