OPEC+ Floods Oil Markets As Quota Surge Threatens Price Stability

OPEC+ has opened the floodgates on global oil supply, shifting its strategy from protecting prices to grabbing market share. The group agreed to boost September output by 548,000 barrels per day, continuing the reversal of their previous 2.2 million barrel daily cutback from 2023. This marks a major change in approach that’s already affecting global oil prices.

OPEC+ abandons price defense for market share, flooding markets with oil and reshaping global energy dynamics.

The “Voluntary Eight” countries, led by Saudi Arabia, are driving this surge. Saudi Arabia alone added 400,000 barrels daily in recent months, helping push total OPEC+ increases to 960,000 barrels per day since April. That’s 44% of the voluntary cuts they had in place since 2022.

Oil prices have fallen in response to these supply changes. Major banks have cut their forecasts, with Barclays now expecting Brent crude to average $66 per barrel in 2025, down $4 from previous estimates. Morgan Stanley and Goldman Sachs have also lowered their projections, with Goldman predicting $60 per barrel for the rest of 2025.

The strategy shift comes amid internal tensions over quota compliance. Some members like Iraq and Kazakhstan have been producing more than their allowed amounts. Saudi Arabia’s push for faster output increases is seen partly as punishment for these non-compliant members. If current compliance issues persist, OPEC+ may completely eliminate voluntary cuts by October. Ministers will hold a video conference on Sunday to formally ratify the production increase decision.

This flood of oil creates challenges for producers outside OPEC+, especially U.S. shale companies. Many now face prices below their break-even points, which could limit new drilling projects and investments. The situation highlights how geothermal energy’s reliability could provide a more stable alternative in the volatile energy market, as it maintains a 96% capacity factor regardless of market fluctuations.

Oil futures have stabilized near $70 per barrel, but analysts worry excess supply could create a global surplus later this year. This might push prices even lower, especially with weaker import demand in some regions.

It’s unclear if OPEC+ will pause these increases after September. What’s certain is that the group’s pivot from defending prices to chasing market share marks a significant change in global oil dynamics that will affect energy markets worldwide.