OPEC+ has approved another increase in oil production quotas for August 2026 as Gulf producers gradually recover from months of disruption caused by the Middle East conflict and the closure of the Strait of Hormuz.

OPEC+ Approves August Production Increase

Ministers from seven OPEC+ members, Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman, held a virtual meeting on Sunday and agreed to raise collective production quotas by 188,000 barrels per day.

According to a statement issued by OPEC+, the adjustment will take effect in August 2026 as member states continue restoring output following the recent conflict in the region.

Recovery Follows Strait of Hormuz Disruptions

Oil production across several Gulf countries declined sharply after the Strait of Hormuz was largely shut during the Middle East war, disrupting exports for several months.

OPEC data show that between the first quarter of 2026 and May, combined oil production from Saudi Arabia, Iraq, and Kuwait fell by around six million barrels per day.

The situation began to improve after Iran and the United States signed a memorandum of understanding on June 17, committing to remove obstacles to maritime traffic through the Strait of Hormuz while negotiations continue.

Shipping Activity Gradually Returns

Since the agreement was reached, maritime traffic through the Strait of Hormuz has gradually resumed, contributing to a decline in global oil prices toward levels seen before the conflict.

According to Bloomberg, citing a U.S. official, oil shipments through the waterway may already have exceeded 10 million barrels per day.

However, analysts caution that much of the oil currently leaving the strait had already been stored in tankers or storage facilities before exports resumed.

Ole Hansen, an analyst at Saxo Bank, said restarting suspended production takes time, adding that July is expected to show gradual improvement, while a more significant recovery is likely in August.

Analysts Expect Market Surplus

Commodity analyst Giovanni Staunovo of UBS said current production remains below OPEC+ targets despite the recent quota increase.

Meanwhile, Jorge Leon of Rystad Energy said the market is expected to move into a supply surplus next year. While rebuilding depleted inventories may initially absorb additional production, he warned that producers could later face increased downward pressure on oil prices.

Iraq Seeks Higher Future Production Quota

Following production losses during the conflict, Iraq has requested a higher production quota from OPEC+ to offset its wartime shortfall, according to the Iraqi Oil Ministry.

Analysts believe the request is unlikely to be addressed immediately, as production has yet to return to pre-war levels. Instead, the issue is expected to be considered during OPEC+'s 2027 capacity review, when member countries' production baselines and future quotas are scheduled to be reassessed.