A group of major oil-producing nations is expected to continue raising output when they meet on Sunday to decide on July's production quota, analysts told.
After hitting a pause on production hikes for the first quarter of 2026, several countries from the OPEC+ cartel resumed output increases, beginning with gains of 206,000 barrels per day in April and May. They dialed down the pace to 188,000 barrels for June.
The cartel is seen lifting July's production quota by another 188,000 barrels per day, DBS Bank's Suvro Sarkar said.
The United Arab Emirates ended its more than five decades of the Organization of the Petroleum Exporting Countries' membership in May.
"The first meeting after UAE exit had already set the template, as they went for a (188,000 bpd) increment, essentially adjusting for UAE's exit, but not addressing it upfront," Sarkar said. "We can expect similar increment this time as well."
West Texas Intermediate crude oil was down 3% at $90.22 a barrel in Friday late afternoon trade, while Brent fell 2.2% to $92.93. The benchmarks were on track for weekly gains following two successive weekly declines.
"Given oil is trending close to $100 (a barrel), there's no pressure as such on OPEC to pause," Sarkar said. "The increases are mainly on paper at this stage and the unwinding suits Saudi's strategy of defending market share while prices remain elevated from the war premium."
Amena Bakr, head of Middle East energy and OPEC+ research at Kpler, expects an adjustment of around 188,000 barrels per day or 190,000 barrels per day.
But Bakr echoed views that higher supply won't actually hit the market, given the Strait of Hormuz's effective closure.
"Even if the strait opens, it's going to take months for us to see production being restored to pre-war levels," Bakr toldin an interview.
The Strait of Hormuz, the world's most important chokepoint for crude flows, has remained effectively shut since the US-Iran conflict started at the end of February, even as a ceasefire continues to hold.
Last month, OPEC reduced its global oil demand growth outlook for 2026, but upgraded its projection for next year. In a separate report, the International Energy Agency forecast a sharper decline in global oil demand this year than previously expected as the Middle East conflict drove up energy prices.
