OPEC+ to Pause Oil Output Increases After September
OPEC+, a coalition including major oil producers like Saudi Arabia, Russia, and Iraq, is set to pause its phased increase in crude output after September. The group has been gradually raising production since early this year due to supply disruptions caused by the war with Iran. However, it now plans no further increases for the remainder of 2024. The decision comes as several OPEC+ members struggle to meet their quotas amid ongoing logistical challenges and geopolitical tensions in key shipping routes like the Strait of Hormuz. Iraq's output has dropped significantly due to these disruptions, leading to internal pressures within OPEC over production limits. The UAE left OPEC earlier this year, and Iraq may follow if it cannot secure a higher quota. The pause could help stabilize oil prices by limiting supply increases at a time when global inventories are being depleted. Analysts like Goldman Sachs have warned that crude prices might rise above $120 per barrel in the near term due to ongoing disruptions.
Topics: geopolitical impact oil OPEC+ production quotas