The global oil market could have more oil than needed this year after OPEC+ decided to increase production more than expected.

At a meeting on Saturday, eight members of OPEC+—which includes Russia and several other countries led by Saudi Arabia—agreed to raise their oil production in August by 548,000 barrels per day.

Countries like Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman said they made this decision because the oil market is strong and the world economy looks stable. They believe the market can handle the extra supply.

This move surprised many, especially since OPEC+ had already increased output three times in recent months by 411,000 barrels per day each time. These increases are part of a plan to slowly reverse the 2.2 million barrels per day in cuts that began in 2022.

With this latest increase, OPEC+ has now brought back over 87% of those earlier cuts. They also said they could pause or even reverse these increases if market conditions change, in order to keep the oil market stable.

Too Much Oil Coming?

This new increase adds a large amount of oil to the market, showing that OPEC+ wants a bigger share of global oil sales.

They hope that higher demand in the summer—especially in the Northern Hemisphere—will use up the extra oil. But there’s a challenge: countries outside of OPEC+, like the United States (now the world’s top oil producer), are also increasing their oil production quickly.

According to the U.S. Energy Information Administration, the country produced a record amount of crude oil in April — 13.47 million barrels per day (bpd). This beats the previous record of 13.45 million bpd set in October 2024.

Other countries outside the OPEC group, like Brazil, Canada, Guyana, and Norway, are also increasing their oil production. The International Energy Agency (IEA) expects non-OPEC countries to grow production by about 1.4 million bpd this year.

Even without more oil from OPEC+, this increase in non-OPEC output is enough to meet global oil demand growth forecasts, which range between 0.72 million bpd and 1.3 million bpd. The IEA and OPEC have different estimates, but both fall within this range.

With so much oil being produced, there are concerns the market could end up with a surplus of 500,000 to 600,000 bpd, or even more. OPEC+ seems to be challenging non-OPEC producers for market share, which could cause oil prices to drop.

For example, in May — before tensions in the Middle East worsened — Goldman Sachs predicted average oil prices would fall below $60 per barrel, with Brent at $56 and West Texas Intermediate at $52, during the second half of the year.

Goldman Sachs is not alone. Many analysts are lowering their price forecasts for 2025–26, expecting prices to be in the $60 range or even lower. Unless there’s a major geopolitical or economic shock, OPEC+’s latest actions make these lower prices more likely.

Published: 7th July 2025

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