OPEC+ Pushes Ahead With July Output Increase as Crude Retreats From Hormuz Highs
OPEC+ agreed on Sunday (2026-07-06) to boost oil production by 188,000 barrels per day starting in July, pressing ahead with output expansion even as ICE Brent crude front-month slid to $72.11 — nearly $26 below the peak prices hit during the height of the Hormuz disruption in May.5
The decision extends a pattern that has become familiar since the UAE left the alliance in May: a smaller, tighter core group pushing through quota increases faster than the market's supply-risk premium evaporates. Seven OPEC+ members — Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia and Saudi Arabia — signed off on a June quota increase of the same volume, and July follows the same arithmetic.1
The timing is uncomfortable. ICE Brent front-month crude has retreated sharply from the $97.91 level seen when the Hormuz threat was at its most acute during the week of May 18 (2026-05-18). The IEA warned at the time that rapidly depleting inventories were piling more pressure on the market; now, with flows beginning to recover, the group is adding barrels into a market no longer supported by a scarcity fear trade.3,5
At the height of the crisis, the EIA assessed that Iraq, Saudi Arabia, Kuwait, the UAE, Qatar and Bahrain had collectively shut in 10.5 million barrels per day. The restart is far from instantaneous. Morgan Stanley has warned that the market will lose another billion barrels over the course of 2026 as oilfields restart, refineries come back online and the tanker fleet repositions — a supply deficit that sustained prices above $90 in late May but has yet to fully reverse even as OPEC+ accelerates additions.4,3
The UAE's departure complicates the group's capacity math. Abu Dhabi was the third-largest producer within OPEC before it left on May 1 (2026-05-01), having already been producing beyond its agreed quota. Its absence removes a source of quota friction but also removes a buffer: above-quota UAE barrels were always available to smooth disruptions. With it gone, the remaining seven members carry both the output increases and any future shock-absorbing role.2,1
Kazakhstan's numbers illustrate the strain on non-Gulf producers within the alliance. Energy Minister Yerlan Akkenzhenov reported that Kazakhstan produced 19.7 million tons of oil and gas condensate between January and March 2026, equivalent to 80.2% of the year-earlier level. Exports came in at 15.3 million tons, down 21.5% year-on-year. The ministry still forecasts full-year exports at 76 million tons, but the country is running materially behind 2025 output levels.1
Globally, OPEC+ accounted for 55.9% of the 74.85 million barrels per day produced worldwide in 2025, according to OPEC's Annual Statistical Bulletin. The group's core members will expect Kazakhstan and others to sustain 2025's output gains — Kazakhstan rose 239,000 barrels per day to 1.78 million barrels per day last year — even as Q1 2026 production fell well short of that pace.1
Nearly 20 million barrels per day passed through the Strait of Hormuz in 2025, according to the IEA. Even partial disruption to that flow was enough to send Brent above $95. The retreat to current levels reflects a market reading that the worst of the supply-risk premium has passed. But physical recovery — restarting shut-in fields, clearing refinery backlogs, repositioning a scattered tanker fleet — moves far more slowly than sentiment.1
Analysts say the July increase also highlights long-standing disagreements within OPEC+ over quota allocations and capacity expansion, tensions the UAE's exit has left more exposed rather than resolved. WTI crude front-month stood at $68.77 on Monday (2026-07-06). Whether the group can hold its accelerated ramp together with oil in the high $60s — rather than the crisis-driven $90s that had temporarily aligned members' interests — is the question the next production decision will answer.1,3