OPEC+ Raises Output Again as Gulf Producers Recover from War Disruptions

Seven-nation bloc approves 188,000 bpd increase for August amid slow restart of Strait of Hormuz traffic

Seven key OPEC+ members have agreed to raise oil production by 188,000 barrels per day (bpd) in August 2026, as Gulf exporters move to restore output following months of disruption caused by the Middle East war.

Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman convened virtually on Sunday to approve the adjustment — the latest in a series of incremental increases as the bloc seeks to reclaim lost ground.

The Hormuz Fallout

The war severely curtailed Gulf oil exports after Iran engineered a near-paralysis of the Strait of Hormuz, choking off a critical artery of global energy supply for several months. Combined production by Saudi Arabia, Iraq, and Kuwait alone fell by roughly six million bpd between the first quarter of 2026 and May, according to OPEC data.

The situation began to ease after the United States and Iran signed a memorandum of understanding on June 17, committing both sides to removing obstacles to maritime traffic through the strait for the duration of ongoing negotiations. Shipping traffic in the region has since slowly recovered, and oil prices have dropped sharply to near pre-war levels in anticipation of a gradual return to normal.

Restart Takes Time

Analysts caution that the recovery remains a work in progress. Much of the oil currently moving through the strait has been drawn from tankers and storage facilities rather than fresh production, noted Ole Hansen of Saxo Bank.

"Shut-in production takes time to restart," Hansen told AFP. "Assuming shipping continues to normalise, July will show an improvement with August probably being the month where the pickup accelerates."

UBS commodity analyst Giovanni Staunovo added that production levels are likely still below OPEC+ targets.

Cohesion Under Pressure

Looking ahead, analysts warn the bloc faces mounting internal tensions. A global surplus is widely anticipated for 2027, which could push prices lower just as member states are pressing for higher output allowances.

Iraq has already formally requested increased quotas to offset wartime losses — a demand Hansen said is "not imminent" given production remains well below pre-conflict levels. The request may be folded into a broader capacity review scheduled for end-2026, when OPEC+ is due to reassess member baselines.

The group is also navigating the aftermath of the United Arab Emirates' departure from the bloc in May, which has further complicated efforts to maintain cohesion under pressure.