OPEC+ Adds 188,000 bpd in September as Middle East Risks Persist

OPEC+ approved a 188,000 barrel-per-day output increase for September, unwinding the last of the 1.65 million bpd voluntary cuts, while threats to shipping through the Strait of Hormuz and Bab el-Mandeb keep a geopolitical premium on WTI and Brent crude.

"The committee stressed the importance of safeguarding international maritime shipping lanes to ensure the uninterrupted flow of global energy supplies," the Joint Ministerial Monitoring Committee said in a statement after its 67th meeting, warning that attacks on energy infrastructure reduce supply availability and increase market volatility.

WTI crude held above $81.00 after rebounding from $78.40 trendline support, while Brent traded near $84.90 after finding support at $80.60. Natural gas futures sat around $2.77 near the lower boundary of an ascending channel. Brent rose 24 percent in July and WTI climbed 21 percent, the largest monthly gains since March, as the US-Iran conflict disrupted flows through the strait that carries a fifth of the world's oil and gas.

The competing forces leave prices balanced between rising supply and persistent disruption risk, with the net direction hinging on this week's US data — JOLTS job openings, ADP employment, ISM Services PMI and Friday's Nonfarm Payrolls — which will shape expectations for Federal Reserve policy and industrial energy demand. OPEC+ meets again September 6 to set October output.

Output Increase Completes Rollback of 2023 Cuts

Seven members — Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman — agreed to the increase during a virtual meeting, marking the sixth consecutive month of output expansion. The move follows monthly rises of 206,000 bpd for April and May agreed before the UAE left the group, and effectively ends the voluntary production cuts established in 2023.

The seven countries said the adjustment would let participating nations accelerate compensation for previous shortfalls, reaffirming their commitment to the OPEC+ Declaration of Cooperation. The group will continue monthly meetings to assess market conditions, with the next session scheduled for September 6.

The decision comes as the group faces a weakening oil outlook and internal resistance. Iraq, a founding OPEC member, has pressed for higher production quotas aligned with its capacity, with Prime Minister Ali Al Zaidi arguing during a July White House meeting that Baghdad deserved a fair share to boost oil revenues.

Geopolitical Premium Persists as Hormuz Traffic Stays Minimal

Shipping traffic through the Strait of Hormuz remains minimal after the conflict began February 28, and the entry of Yemen's Houthi rebels — including a blockade of Saudi shipping in the Red Sea and attacks on tankers passing through Bab el-Mandeb — has added further uncertainty. Washington and Tehran had agreed to a 60-day ceasefire and signed a 14-point framework, but that agreement collapsed and the two sides resumed retaliatory strikes for 13 consecutive nights in July.

President Donald Trump said Sunday he had halted military strikes on Iran after Tehran and other Middle Eastern countries urged Washington to delay attacks, citing agreement on the perimeters of a deal. Iranian officials denied negotiations had started, leaving the market to price an uneasy pause rather than a resolution.

The last time oil prices swung this sharply on a Middle East conflict, the premium faded within weeks once shipping lanes reopened. This time, with insurance costs rising and transport times lengthening, traders are keeping the risk premium embedded in every barrel even as OPEC+ adds supply.

For natural gas, the fundamental outlook remains bullish despite high LNG inventories, with the US continuing its push to become the world's largest LNG exporter and strong overseas demand offsetting domestic stockpiles. Strong LNG export volumes are expected for the remainder of the week, supported by OPEC+ supply management and the volatile geopolitical environment.

This article is for informational purposes only and does not constitute investment advice.