• OPEC+ plans a 411,000 bpd production increase for July 2025, continuing its reversal of earlier cuts.
  • Major banks slash oil price forecasts, with Brent crude expected to average $62–$66 through 2026.
  • The move pressures U.S. shale producers and tests compliance among OPEC+ members like Iraq and Kazakhstan.

OPEC+ Doubles Down on Output Strategy

OPEC+ is poised to implement another substantial oil production increase in July 2025, with eight key members—including Saudi Arabia, Russia, and the UAE—adding 411,000 barrels per day to global supply. This marks the third consecutive monthly hike as the group gradually unwinds the 2.2 million bpd voluntary cuts implemented since 2022 to stabilize markets.

The decision comes amid sliding prices, with Brent crude futures dipping below $70 this week. Major institutions have responded with downward revisions: Barclays now projects a 2025 average of $66/bbl, while Morgan Stanley warns of $62.50 in H2 2025. "The market is clearly pricing in sustained oversupply," noted one Geneva-based trader, speaking on condition of anonymity.

Compliance and Competition Heat Up

Behind closed doors, tensions over production discipline persist. Saudi Energy Minister Prince Abdulaziz bin Salman has reportedly pressed Iraq and Kazakhstan—both chronic quota violators—to align with group targets. The phased increases serve dual purposes: absorbing excess capacity while maintaining leverage to pause if prices deteriorate further.

U.S. shale operators face mounting pressure, with breakeven costs for many Permian Basin wells now exceeding current futures prices. "At $65 Brent, we'll see significant capex cuts by Q4," predicted a Houston-based analyst at a bulge-bracket bank. Meanwhile, non-OPEC supply growth continues, with the IEA forecasting 1.8 million bpd of new production in 2025—mostly from Guyana, Brazil, and Canada.

What Comes Next

Market watchers expect OPEC+ to maintain its monthly review cadence, with delegates suggesting the full 2.2 million bpd cut reversal could complete by October 2025 absent demand surprises. But with global inventories building and China's economic recovery faltering, some members are privately advocating for a pause. As one Vienna-based delegate conceded: "Nobody wants another 2014-style price war."