Oil prices under pressure following OPEC+ cuts rewind

Oil prices remain under pressure in the face of potential oversupply and uncertain demand, as OPEC+ rolls back output cuts

The eight OPEC + countries which previously announced additional voluntary adjustments (ie Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman) will implement a production adjustment of 548,000 bpd per day in August 2025 from the July 2025 required production level, in accordance with the decision agreed upon on 5 December 2024 to start a gradual and flexible return of the 2.2mn bpd voluntary adjustments starting from 1 April 2025. This is higher than the last three rollbacks of 411,000 bpd and means that OPEC+ is on track to fully unwind 2.2mn bpd of cuts nearly a year ahead of schedule.

“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,” said OPEC in a statement, noting “steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories”. The eight countries will meet on 3 August 2025 to decide on September production levels.

“Investors remain cautious, especially as seasonal demand typically softens later in the year and US trade tensions intensify. President Trump’s upcoming tariffs, including a fresh threat targeting BRICS-aligned nations, added to the markets cautious tone,” commented global financial group MUFG, adding that the move marks a sharp shift from OPEC+’s past restraint.

“Opec+ keeps surprising the market,” said Jorge León, head of geopolitical analysis and senior vice president at energy consultancy Rystad. “This sends a clear message, for anyone still in doubt, that the group is firmly shifting towards a market share strategy.”

“It was pointless to maintain these voluntary cuts once the strategy became market share rather than price defence. But for the sake of appearances, and perhaps with the hope of managing market expectations, they have to go through the motions anyway, notionally unwinding the cuts at an incremental pace,” said Harry Tchilinguirian, group head of research at Onyx Capital Group in a LinkedIn post.