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An oil storage facility in Groot-Ammers, The Netherlands. getty The global oil market is likely heading for a surplus this year following a higher than expected production hike by OPEC+ over the weekend. At their meeting on Saturday, eight members of OPEC+, a select group of Russia-led oil producers and the Organization of the Petroleum Exporting Countries (OPEC) spearheaded by Saudi Arabia, opted to raise their collective production levels for August by another 548,000 barrels per day. Producers Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman cited “healthy oil market fundamentals and steady global economic outlook” as the reasons behind the move, indicating their belief that the global oil market can absorb the additional supply. The action, which took the market by surprise, followed three consecutive output hikes of 411,000 bpd announced by OPEC+ in recent months. The series of hikes are part of the producers’ group’s attempt to unwind 2.2 million bpd of previously agreed cuts since 2022. The latest hike implies 1.92 million bpd or over 87% of those cuts have now been unwound. As in previous instances, OPEC+ said: “The gradual increases may be paused or reversed subject to evolving market conditions. This flexibility will allow the group to continue to support oil market stability.” An Oil Market Surplus Is Imminent For all intents and purposes, the volume of the hike is an oversized one that’s demonstrative of OPEC’s intention of putting more barrels on the market for a greater market share. The hope is that summer demand in the Northern hemisphere would absorb the additional barrels. However, the only issue that non-OPEC production is also rising at a record breaking pace led by the U.S., currently the world’s largest oil producer. ForbesCan Better Liquidity, Pricing Diversity Help Absorb A Global LNG Glut?By…

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Filed under: News - @ July 6, 2025 7:26 pm