Eight OPEC+ Members Announce June Oil Output Boost

The countries will add 411,000 bpd to their output in June. File Image / Pixabay

Eight OPEC+ countries have agreed to accelerate oil production, announcing a 411,000 bpd increase for June.

Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman, which previously voluntarily cut output beyond OPEC+ targets, agreed to raise production at a virtual meeting on Saturday, OPEC said in a statement on its website.

The decision comes despite weakening global demand and falling oil prices, with Brent crude dipping below $60/bl this morning.

Still, OPEC+ insists market fundamentals remain strong, citing low inventory levels.

According to Reuters, the move is partly driven by Saudi Arabia's frustration over continued quota violations by Iraq and Kazakhstan.

Riyadh has reportedly warned members it is prepared to tolerate a sustained period of low prices unless compliance improves, signalling a tougher stance going forward.

"OPEC+ leader Saudi Arabia could amplify this policy shift and deliver further production increases unless those nations fall in line," Daniel Hynes, senior commodity strategist at ANZ Bank, said in his LinkedIn post. 

Analysts expect oil prices to soften further as markets adjust to the additional supply.

However, OPEC+ officials continue to frame the ramp-up as a "managed unwind" rather than a fight for market share.

Initially, the group had planned to raise production by 138,000 bpd per month as part of gradually unwinding the 2.2 million bpd cuts.

The eight countries will meet again on 1 June to decide July production levels.