OPEC+ to Continue Increasing Production? Analysts Emphasize Still Insufficient to Offset Russian Oil Shortage

Two OPEC+ sources on Sunday said that OPEC+ has agreed in principle to increase its oil production by 548,000 barrels per day in September. The organization will start the meeting at 7 pm Beijing time on Sunday and make a decision then.

The main factor driving the increase is the possibility of reduced Russian oil output. Earlier reports suggested that the US has asked India to stop buying Russian oil. On the other hand, the EU has implemented new sanctions against Russia, reducing the upper price limit for buying Russian oil and exerting pressure on buyers of Russian oil.

However, India's Foreign Ministry stated that it will continue to purchase oil from Russia. Indian Foreign Ministry spokesperson Randhir Jaiswal emphasized on Friday that India's overall stance on ensuring its energy needs is dependent on market oil supply conditions and the current global situation.

Data analysis company Kpler shows that Russian oil supplies once accounted for nearly 40% of India's import volume, making Russia the largest oil supplier to New Delhi.

Will it go up again?

OPEC+ accounts for about half of the world's oil production capacity and has been reducing output over the years to support market prices. However, this year, the organization changed its strategy in response to US President Trump's call for increased production.

OPEC+ began increasing production from April, adding 138,000 barrels per day, followed by significant increases of 411,000 barrels per day in May, June, and July, and 548,000 barrels per day in August. If the organization agrees to increase production again by 548,000 barrels per day in September, it will completely reverse its previous reduction commitment.

However, German bank analyst Carsten Fritsch pointed out that regardless of any decision, OPEC+ cannot fully replace Russian oil supplies, and effective sanctions will lead to a significant surge in oil prices.

According to Morgan Stanley on Thursday, the US threat of imposing sanctions on Russian oil may put Russian oil at risk, resulting in a daily shortage of 2.75 million barrels.

In addition, the market is also concerned about the potential impact of US tariffs on oil prices, with US tariffs set to take effect on August 7. Suvro Sarkar from DBS Bank said that the resolution of trade agreements or lack thereof has been the main driver of recent oil price increases, and further progress in US negotiations may strengthen confidence in the oil market.