Oil market watch: Saudi, Russia-led OPEC+ eyes fresh hike for August; focus to likely shift from price stability to market share

Saudi Arabia, Russia and six other major oil producers from the OPEC+ alliance will meet on Saturday to decide their crude output strategy for August, with analysts expecting the bloc to approve another production hike of 411,000 barrels per day (bpd), mirroring decisions made for May, June and July. The meeting will be held virtually and will include representatives from Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman, according to news agency AFP.The so-called “Voluntary Eight” (V8) group within OPEC+ had earlier stunned markets by reversing course from prolonged supply cuts and opting to raise production sharply from May onwards. This shift has pulled down oil prices to a narrow band of $65–$70 per barrel, far below the highs seen earlier during Middle East tensions.Analysts cited by AFP say that the alliance appears increasingly focused on reclaiming market share over price stability. “The group has placed an increased focus on regaining market shares over price stability,” said Saxo Bank analyst Ole Hansen, highlighting the competitive pressure from rising supply elsewhere, including the United States.Despite the scheduled hike, actual supply additions could fall short. As per AFP, Rystad Energy’s Jorge Leon said that the real increase might be only 250,000–300,000 bpd, much like May’s 200,000 bpd gain, despite doubled quotas. This shortfall is partly due to non-compliance by countries like Kazakhstan and Iraq, whose production exceeded agreed limits. UBS analyst Giovanni Staunovo added that such inconsistencies may be pushing leading producers like Saudi Arabia to tighten enforcement via output-driven price pressure.While market watchers are bracing for the expected rise, there is little anticipation of price shocks, especially as geopolitical concerns have eased. A recent 12-day conflict between Iran and Israel, which had temporarily pushed prices over $80, didn’t cause supply disruptions. “Given there were no supply disruptions so far, the war is unlikely to impact the decision,” Staunovo said, as cited by AFP. Hansen echoed that the conflict could even justify faster production increases if Iran’s exports face future hurdles.According to news agency Reuters, earlier, some OPEC+ insiders believed that the group could consider a hike larger than 411,000 bpd. But consensus still leans toward a continuation of the current pace, especially as Brent futures hovered around $68.30 per barrel and WTI near $66.50 in holiday-thinned trade ahead of the meeting.Analysts such as Tamas Varga of PVM warned that additional output, if sustained, may swell global oil inventories in the second half of the year. “Oil balance estimates will be reassessed and will suggest accelerated swelling in global oil reserves,” Varga said, as quoted by Reuters.The eight OPEC+ countries have already committed to raising production by 1.37 million bpd over four months, roughly 62% of the 2.2 million bpd they initially pledged to cut. With US nuclear talks with Iran possibly resuming and global economic policies shifting, the alliance’s strategy is under growing scrutiny.Still, Saturday’s meeting is not expected to trigger any major market volatility, as traders are largely in a “wait-and-see mode”, said Price Futures Group’s Phil Flynn, who cited upcoming US fiscal changes and lingering tariff uncertainty as additional variables, according to Reuters.