The decision, reached during a meeting on Sunday, comes against the backdrop of a prolonged supply crisis triggered by the conflict between the United States and Iran, which has severely affected oil shipments through the strategically important Strait of Hormuz.
The waterway, a critical route for global crude exports, has remained partially disrupted by the conflict, limiting the ability of several major producers to deliver oil to international markets. As a result, key OPEC+ members, including Saudi Arabia, have struggled to fully meet customer demand since late February.
The group's challenges have been compounded by the departure of the United Arab Emirates from the Organization of the Petroleum Exporting Countries after nearly six decades of membership, marking one of the most significant shifts within the producer alliance in recent years.
Production Targets Rise Again
Seven core OPEC+ members—Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia and Oman—approved an increase of 188,000 barrels per day (bpd) in production targets beginning in July.
The adjustment mirrors the increase adopted for June, following larger monthly hikes of 206,000 bpd in April and May. Those earlier increases were later revised to account for the UAE's withdrawal from the group.
Collectively, the seven producers have already raised output quotas by nearly 600,000 barrels per day between April and June as part of a broader effort to return previously withheld supply to the market.
However, the actual impact of these quota increases has been limited. OPEC data show that production among member countries has fallen sharply because of export disruptions, averaging 33.19 million barrels per day in April compared with 42.77 million barrels per day in February.
This gap highlights the growing disconnect between official production targets and the volumes that are actually reaching global markets.
Market Focus Remains on Strait of Hormuz
Analysts say the effectiveness of any production increase will largely depend on the reopening of the Strait of Hormuz.
"An OPEC+ production increase means very little while the Strait of Hormuz remains closed," said Jorge Leon, an analyst at Rystad Energy and a former OPEC official.
"When the Strait of Hormuz reopens, the market could move very quickly from fear of shortage to fear of surplus."
Oil markets have been highly volatile since the outbreak of the conflict. Prices surged sharply as concerns over supply disruptions intensified, but have recently eased as traders reassessed geopolitical risks.
On Friday, crude prices slipped to around $93 per barrel as investors became more confident that a broader escalation between Washington and Tehran was becoming less likely. Before the conflict began, oil had been trading closer to $72 per barrel.
Unwinding 2023 Production Cuts Nears Completion
The latest production increase forms part of OPEC+'s ongoing strategy to gradually reverse a voluntary production cut of 1.65 million barrels per day agreed by participating members in 2023.
According to Reuters calculations, after July's increase the seven countries will have approximately 567,000 barrels per day of the original cut left to restore, taking into account the UAE's departure from the alliance.
If the group continues with similar monthly increases in August and September, the unwinding process could be completed by the end of the third quarter.
The gradual return of supply reflects OPEC+'s attempt to balance market stability with member countries' desire to reclaim market share after years of output restraint.
No Changes to Broader OPEC+ Policy
In a separate meeting involving all OPEC+ members on Sunday, ministers left the alliance's wider production framework unchanged.
The current group-wide policy, which extends through the end of 2026, remains in force, underscoring the coalition's long-term commitment to managing supply levels in response to market conditions.
OPEC+ also confirmed that work is continuing on a comprehensive review of member countries' production capacities. The assessment will serve as the basis for determining production baselines and future quotas beginning in 2027.
The alliance emphasized the importance of completing the review, which is expected to play a key role in shaping the group's production strategy for years to come.
While OPEC+ continues to increase output targets, the real test for global oil markets remains the restoration of normal shipping flows through the Strait of Hormuz. Until then, concerns over supply shortages are likely to continue influencing prices and market sentiment worldwide.