Eight OPEC+ oil producers have confirmed they will hike production in July.

Eight OPEC+ oil producers have confirmed they will hike production in July, according to their previously agreed plan to unwind 2.2mn bpd in voluntary cuts from April 2025

The eight OPEC+ countries, which previously announced additional voluntary adjustments in April and November 2023, namely Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman, will hike production by 411,000 bpd in July from the June 2025 production level.

In a statement, OPEC comments that this action is taken in view of the “steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories,” and in accordance with the decision agreed upon on 5 December 2024 to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments starting from 1 April 2025. It adds that the gradual increases may be paused or reversed subject to evolving market conditions, and that this flexibility will allow the group to continue to support oil market stability.

The eight OPEC+ countries also noted that this measure will provide an opportunity for the participating countries to accelerate their compensation. The eight countries reiterated their collective commitment to achieve full conformity with the Declaration of Cooperation, including the additional voluntary production adjustments that were agreed to be monitored by the JMMC during its 53rd meeting held on 3 April 2024.

They also confirmed their intention to fully compensate for any overproduced volume since January 2024. The eight OPEC+ countries will hold monthly meetings to review market conditions, conformity, and compensation.

The eight countries will meet on 6 July 2025 to decide on August production levels.

Despite the increase in supply, oil prices have held steady, with geopolitical tensions likely contributing, such as the Russia/Ukraine war, the release of the IAEA report on the Iran nuclear programme and potential supply disruptions in Libya and Canada.

Some analysts view the OPEC+ supply hike as reflecting Saudi Arabia’s attempt to regain market share, with its budget and spending plans under pressure.

Jadwa Investment, in its report on Saudi Arabia’s Q1 budget statement, notes that the Kingdom recorded a fiscal deficit of SR58.7bn in Q1-25, as revenue declined by 10% year-on-year due to lower oil revenue, while spending was 5% higher. Oil revenue declined year-on-year by 18% due to lower dividends from Saudi Aramco and lower oil prices.

“Oil revenue will remain under pressure in 2025 as oil prices have trended lower than in Q1 and output gains will only partly offset this,” it comments.

“The outlook for oil prices remains highly uncertain, and much will depend on the fortunes of the global economy during this period of volatile US policymaking. The evolution of OPEC+ policy is also uncertain and important.”

In its latest Oil Market Update, Jadwa remarks, “Global fundamentals may improve if US policymaking settles down, the US Fed finds room for more rate cuts, and China continues with stimulus. But, with oil inventories likely to build during 2025, further oil production growth and structurally slowing Chinese demand, the oil market may lack an upward catalyst.”

Under the deal, ADNOC Drilling will acquire eight land rigs in Kuwait and Oman. (Image source: ADNOC Drilling)

ADNOC Drilling has signed an agreement to acquire a 70% stake in SLB's land drilling rigs business in Kuwait and Oman, as it seeks to expand its regional footprint beyond the UAE

Under the deal, ADNOC Drilling will acquire eight fully operational land rigs under contract with the respective national oil companies (NOCs) of both countries, two in Kuwait and six in Oman. It will accelerate ADNOC Drilling’s expansion plans, providing it with a foothold into what it sees as two highly stable GCC markets with clear drilling plans driven by top-tier clients, in a move that will generate attractive returns.

Through this partnership, ADNOC Drilling will gain immediate access to earnings, cashflow and returns through the eight land rigs. This acquisition will enhance the company’s ability to deploy cutting-edge technologies, integrated drilling services, digital solutions and AI-driven efficiencies, according to the company – optimising performance, reducing environmental impact and driving value for customers across the region. The deal offers scope for ADNOC Drilling to acquire the remaining stake over time.

Abdulrahman Abdulla Al Seiari, ADNOC Drilling CEO, commented that the move is a “very exciting opportunity” for ADNOC Drilling, reinforcing its position as one of the leading companies in drilling and integrated services.

“Our partnership with SLB will provide ADNOC Drilling with a solid operational and financial platform to further expand in the region,” he said. “This business is well-established, profitable and operating with long-term contracts, making this a highly complementary and value-accretive addition to our portfolio. This move represents a calculated and cost-effective approach with a clear focus on financial discipline, value accretion and risk management.”

Jesus Lamas, president, Middle East and North Africa, SLB, added, “This partnership reflects the strong collaboration between SLB and ADNOC Drilling, and our shared commitment to driving value through collaboration across the region. We are confident that, working together with ADNOC Drilling, the business will continue to grow and deliver outstanding performance for our customers. We look forward to expanding our broader strategic partnerships with key regional leaders across the energy value chain, in line with SLB’s focused regional growth strategy."

ADNOC Drilling continues to record strong growth, fuelled by the expansion of its onshore and offshore fleets, as well as the continued growth of the oilfield services (OFS) segment and new joint ventures launched in 2024. The company now has the largest fleet in the Middle East, seeing net profits rise by 26% in 2024 to US$1.3bn.

Egypt needs to secure LNG and LPG deals at competitive prices.

The Gulf can help stabilise Egypt’s energy market, says leading energy and commodity trading firm BGN International

From the sun-scorched ports of Alexandria to the industrial sprawl of Suez, Egypt’s energy story is at a critical turning point. For decades, the country enjoyed the luxury of being a net exporter of natural gas, with domestic production more than meeting its own needs. Today, that narrative has flipped. Rapidly rising domestic energy demand – projected to surge by 39% this decade – combined with a worrying decline in local production has left Egypt increasingly dependent on imported fuel. In a country where economic stability and political calm are tightly bound to energy security, this imbalance has become a pressing concern.

The solution doesn’t lie in short-term fixes but in a strategic, Gulf-backed reset of Egypt’s energy market. That means securing long-term LNG and LPG supply deals at competitive prices and, just as critically, using those partnerships to create local jobs, transfer vital technology, and give Egyptians a more active role in powering their economy.

This is not merely an economic argument – it’s a political imperative. With youth unemployment at 19.7% among those aged 20-24, Cairo needs to turn energy investments into engines of job creation. Collaborations with multinational players should go beyond resource extraction, focusing instead on empowering local talent to build, operate, and eventually lead the country’s energy infrastructure. Gulf investment, if properly structured, can help catalyse this shift by demanding that technology transfer and domestic workforce development are baked into every deal.

Addressing supply gaps

Yet, even with the right partners, time is short. Egypt recently issued a tender seeking four LNG cargoes for delivery between February and March, a clear signal that near-term supply gaps must be addressed immediately. Fulfilling urgent gas needs through last-minute tenders would be better served with longer term contracts with serious natural gas players like Dubai-based BGN International, an energy and commodity trading firm with an extensive natural gas division.

The firm already contributes to Egypt’s oil sector through its large stake in the Canadian company Mediterra Energy and its gas operators are steadily growing there. As the largest buyer of LPG from the United States and a key player in global oil and gas flows, BGN has the reach and logistical muscle to secure competitive LNG contracts at a time when Egypt’s import needs are becoming both more urgent and more expensive.

But stabilising Egypt’s energy future isn’t just about meeting domestic demand – it’s about revitalising exports and reasserting the country’s role as a regional energy hub. Egypt already boasts significant infrastructure, from the Idku and Damietta LNG export terminals to its extensive pipeline network. What’s required now is a fresh approach that integrates these conventional assets with forward-looking investments in transition fuels like LPG and LNG.

Flexible approach needed

Here again, companies like BGN International offer a potential model. With decades of experience balancing crude operations alongside transition fuels like natural gas, they demonstrate how energy traders offer countries a flexible range of resources to power economies sustainably. If Egypt can replicate this dual approach – leveraging its geographic advantages while modernising its energy offerings – it could once again become a key exporter to Europe and beyond, even as global markets shift toward cleaner energy solutions.

In the end, the challenge facing Egypt is about more than energy. It’s about restoring confidence – in its economy, in its political stability, and in its role on the global stage. Gulf partnerships can provide the capital and expertise to make that happen. But for those investments to truly pay off, they must come with a commitment to building Egypt’s future not just from beneath the ground – but from within its people.

The current uncertainty around the tariff landscape is reshaping the energy and natural resources sectors.

A new report from Wood Mackenzie highlights the far-reaching implications of ongoing trade tensions for the energy and natural resources sectors

"Trading cases: Tariff scenarios for taxing times", presents three distinct outlooks for the global energy and natural resources industries – Trade Truce (the most optimistic), Trade Tensions (the most likely) and Trade War (the worst outcome) – each painting a dramatically different picture for global GDP, industrial production and the supply, demand, and price of oil, gas/LNG, renewable power and metals through 2030.

“The current uncertainty around the tariff landscape is reshaping the energy and natural resources sectors,” said Gavin Thompson, vice chairman, of energy at Wood Mackenzie. "Lower economic growth will curb energy demand, prices and investment, while higher import prices will raise costs in sectors from battery storage to LNG. Energy leaders must now become masters of scenario planning, preparing for everything from continued growth to significant market disruptions.”

The report highlights the key role of trade policies in shaping the future oil markets, with oil demand in 2030 varying by up to 6.9mn bpd between scenarios. In the Trade Truce scenario, oil demand reaches 108mn bpd by 2030, with Brent averaging US$74/bbl, whereas the Trade War scenario sees demand falling in 2026 and Brent plunging to US$50/bbl.

“Trade policies are emerging as a pivotal force in shaping the future of oil markets," said Alan Gelder, SVP refining, chemicals and oil markets. “Falling oil demand results in the global composite gross refining margin collapsing to break-even levels, creating pressure for the rationalisation of weaker sites, particularly in Europe.”

As for the natural gas and LNG outlook, the Trade War scenario could exacerbate the anticipated global LNG oversupply. In the Trade Truce scenario, LNG prices fall from US$11.2/mmbtu in 2024 to US$7.2/mmbtu by 2030 as the market absorbs a wave of new LNG supply growth. In the Trade Tension scenario, the impact might be limited. However, in the Trade War scenario, prices fall further as Chinese LNG demand falls sharply, while tariffs force buyers to redirect US LNG cargoes.

“Although tariffs pose downside risks to global LNG supply, it is possible there will be more investments in US LNG," said Massimo Di Odoardo, vice president of gas and LNG research at Wood Mackenzie. “With President Trump pointing countries towards buying more US energy, including LNG, to reduce their bilateral trade surpluses, more investments in US LNG plants are likely, also contributing to higher gas demand in North America."

The report concludes that while recent trade agreements have encouraged optimism, it is advisable to plan for divergent trade outcomes.

Thompson said, "Despite recent trade agreements, the global trade landscape remains fraught with uncertainty. In a scenario of escalating tariffs, we anticipate significant impacts on manufacturing and industrial production, which could slow the momentum of low-carbon energy investments. Energy companies must be prepared to adapt swiftly to mitigate risks and navigate supply chain disruptions. With major economies potentially facing prolonged recovery periods, agility in strategy and operations will be crucial for the energy sector in this unpredictable trade environment."

Read the entire report here: https://www.woodmac.com/horizons/tariff-scenarios-taxing-times/