OPEC+ Increases August Oil Production as Strait of Hormuz Reopens

Seven core OPEC+ members, led by Saudi Arabia and Russia, agreed during a virtual meeting on July 5 to increase oil production targets by 188,000 barrels per day for August. This marks the fifth consecutive monthly increase and continues a phased rollback of voluntary output cuts established in 2023. The decision follows the gradual reopening of the Strait of Hormuz, which had been paralyzed by Iran and blockaded by the United States during a conflict involving the U.S. and Israel.

Recovery of maritime traffic began following a June 17 memorandum of understanding between Washington and Tehran. While President Donald Trump stated Iran has agreed to "just about everything we need," Iranian officials countered that the strategic waterway is not a "theatre for displaying military prowess." Full normalization of the strait is currently paused due to funeral ceremonies for Ayatollah Ali Khamenei.

Global oil prices declined following the announcement, with Brent crude dropping from peaks of $120 to approximately $71-$72 per barrel, while WTI slipped below $69. The alliance faces significant internal instability; the United Arab Emirates exited the group in early 2026 to produce according to its full capacity, and Iraq has threatened to leave if it is not granted higher quotas to recover war-time losses.

Moving forward, the group pledged compliance with the OPEC+ Declaration of Cooperation. Future production adjustments remain subject to market conditions and could be accelerated, paused, or reversed if necessary.