By Atoyebi Nike
Despite falling crude oil prices nearing pandemic-era lows, the OPEC+ alliance is expected to proceed with a further increase in oil production for July, under pressure from both internal and external forces.
The 22-member bloc — led by Saudi Arabia and Russia — will hold key meetings this week, including a full online session on Wednesday and a critical in-person gathering on Sunday with the eight countries (“V8”) that have made the largest output cuts in recent years.
Energy analysts anticipate that the V8 will maintain a production boost of 411,000 barrels per day, continuing the trend seen in May and June — a significant jump from the initial 137,000 barrels previously planned for July.
“This decision could further dampen already weak oil prices,” said UBS analyst Giovanni Staunovo, referencing Brent crude prices slipping near $60 per barrel.
Internal Tensions and Quota Breaches
The group’s justification for higher output has been “healthy market fundamentals” and low global oil inventories. However, critics argue the strategy masks internal disputes, particularly around quota compliance.
Saudi Arabia, frustrated by repeated overproduction by some members — notably Kazakhstan — appears to be using increased production as leverage to penalize non-compliant countries without resorting to formal sanctions.
Kazakhstan’s violations are reportedly tied to its massive Tengiz oil project, led by U.S.-based Chevron. Iraq and the UAE have also been flagged for exceeding agreed limits.
“Saudi Arabia risks losing credibility if it doesn’t act on these breaches,” analysts at DNB Carnegie noted, adding that Riyadh is under pressure to maintain discipline within the group.
Trump’s Influence on Strategy
Compounding the internal dynamics is the influence of U.S. President Donald Trump, who has publicly pressured OPEC to bring down oil prices to curb domestic inflation.
Experts say Trump’s quiet diplomacy during recent visits to Gulf states has signaled approval for the cartel’s output hikes. “He seems satisfied with OPEC+ actions,” said economist Carole Nakhle of Surrey Energy Economics Centre.
Geopolitical Variables Ahead
The possibility of Iran returning to global oil markets if nuclear talks with the U.S. succeed adds further complexity. A deal would lift sanctions and allow Tehran, an OPEC member, to ramp up oil exports — potentially affecting prices and market dynamics.
Still, for Saudi Arabia, excessively low oil prices pose a dilemma. While they satisfy global consumers, they also jeopardize Riyadh’s economic diversification agenda, which relies heavily on robust oil revenues.
“The kingdom’s economy remains deeply dependent on oil income,” Nakhle noted.
As OPEC+ navigates competing pressures, Sunday’s V8 meeting will be closely watched for signs of how the group balances market stability, political diplomacy, and internal cohesion.
