OPEC+ Weighs Major July Output Hike to Boost Market Share

OPEC+ is actively weighing the possibility of a third consecutive large-scale oil production hike for July, with a proposed increase of 411,000 barrels per day (bpd) under serious discussion ahead of a key meeting scheduled for June 1. Delegates involved in the deliberations revealed that the potential hike, triple the group’s original monthly plans, would mark a continued shift away from years of defending prices in favor of protecting market share and enforcing internal compliance.

Highlights:

• OPEC+ debating a July output hike of 411,000 bpd—matching May and June increases.

• Decision expected at key OPEC+ meeting on June 1, with preliminary talks on May 28.

• Oil prices dropped 0.9% to $64.31 per barrel following hike speculation.

• Motives include disciplining over-producing members and reclaiming global market share.

OPEC+ Output Strategy Reflects Major Policy Shift

Following successive 411,000 bpd increases for May and June, the proposed July hike would represent a continuation of OPEC+’s aggressive stance to flood the market with additional crude. This strategic pivot marks a break from the group’s long-held practice of propping up oil prices, with insiders citing a desire to punish non-compliant members like Kazakhstan and Iraq, while also responding to geopolitical factors such as pressure from the U.S. administration.

The cartel’s current stance has played a role in driving down crude prices, which fell again on Thursday to $64.31 per barrel in London. Analysts argue that the strategy is aimed less at balancing the market and more at signaling dominance and enforcing discipline among producers that have exceeded their quotas despite repeated warnings.

Highlights:

• Third successive output surge would diverge from historical price defense norms.

• Strategy targets quota enforcement and potential appeasement of U.S. policy preferences.

• Price slump reflects oversupply concerns and market reaction to policy pivot.

Internal Divisions and Market Reactions

OPEC+’s top producer Saudi Arabia has taken a hardline stance, warning fellow members about breaching output agreements. Despite public promises, Kazakhstan remains among the largest offenders, continuing to allow international oil firms to operate at near-record export levels.

Oil strategists, including Morgan Stanley’s Martijn Rats, believe another 411,000 bpd hike is likely, as market absorption has so far mitigated price volatility. According to a Bloomberg survey, 25 out of 32 traders and analysts expect the larger hike to be approved, with only a few forecasting a return to smaller adjustments, such as a 138,000 bpd boost.

Highlights:

• Saudi Arabia leading enforcement push against overproducing members.

• Kazakhstan and Iraq continue to defy output caps despite official warnings.

• Most analysts expect OPEC+ to maintain aggressive supply boost pace.

Global Demand Outlook and Strategic Implications

Despite the price pressures, some analysts argue that the previous hikes have been largely absorbed by the market. However, the broader demand outlook remains cautious. The International Energy Agency (IEA) recently forecast a slowdown in oil demand growth in the latter half of 2025, citing global economic headwinds despite strong Q1 consumption.

Goldman Sachs has predicted that OPEC+ might pause additional hikes after July, especially if weakening demand and price softness persist. However, others argue that the group’s strategic pivot toward reclaiming market share may result in continued aggressive production policies.

OPEC+ is also expected to review its long-term quota framework for 2025 and 2026 during virtual meetings on May 28, ahead of the key decision on July supply levels at the June 1 summit.

Highlights:

• IEA sees slowing demand growth after strong early 2025 recovery.

• Goldman Sachs anticipates post-July pause in output hikes.

• May 28 and June 1 meetings to decide future supply and quota framework.

Long-Term Strategy: Market Share Over Price Defense?

Analysts including Harry Tchilinguirian of Onyx Commodities suggest OPEC+ may be undergoing a structural policy shift—abandoning price defense in favor of maximizing market share quickly. Comparing the approach to removing a band-aid, Tchilinguirian argued that an aggressive supply increase strategy may be preferable to gradual adjustments if the group is indeed prioritizing competitive positioning over price stability.

This approach would mark a pivotal change in global energy dynamics, particularly as non-OPEC rivals, such as U.S. shale producers, face their own constraints and uncertainties amid economic and regulatory pressures.

Highlights:

• OPEC+ may be pursuing a full pivot to market-share strategy.

• Quick, aggressive hikes could be a deliberate structural repositioning.

• Strategy may shape competitive global oil dynamics beyond 2025.